Quiz_166 - 91 .ToniMorrisonsbook AMercy $23.95.InAugust2009,thepaperback $15.00.Assumethat100,000hardcoverbooks

Quiz_166 - 91 .ToniMorrisonsbook AMercy...

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91) Book publishers often use price discrimination across time to increase profits. Toni Morrisonʹs book,A Mercy,was published as a hardcover edition in November 2008 at a price of $23.95. In August 2009, the paperbackversion was published at a price of $15.00. Assume that 100,000 hardcover books were sold to hard-core ToniMorrison fans in November 2008, and 400,000 paperback books were sold to casual readers in August 2009.Illustrate each of these situations graphically. Assume that the marginal cost of the hardcover version is $2.00and the marginal cost of the paperback version is $0.75.Answer:A) it is too difficult for sellers to reeducate buyers into accepting even prices.B) it lowers transactions costs.C) it is a way to price discriminate.D) they believe that customers will buy a larger quantity with an odd price.Answer: DDiff: 2Page Ref: 529-530/529-530Topic: Price Discrimination Across TimeLearning Outcome: Micro 14: Discuss production and pricing decisions within monopolies and how public policies affectmonopoliesAACSB: Reflective ThinkingMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.92) Some firms practice odd pricing because92)Diff: 2Page Ref: 531-532/531-532Topic: Odd PricingLearning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies inoligopoliesAACSB: Reflective Thinking93) Suppose the per-unit production cost of a book is $4.00 and the retail price is $32. If the bookpublisher sells books to a bookstore at a 40 percent discount, what is the amount of the publisherʹsmarkup per book? Assume that bookstores sell books at the retail price.93)Diff: 2Page Ref: 532-533/532-533Topic: Cost-Plus PricingLearning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies inoligopoliesAACSB: Reflective Thinking30
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