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Test Review - Your test grade is 88%The professor has configured this test to allow students to:Show Questions Answered CorrectlyShow Questions Answered IncorrectlyShow All Responses Selected By StudentShow What The Correct Response Should BeQUESTION:1[QUESTION BANK ID:107511]TYPE:MULTIPLE CHOICECORRECT<< HIDE ANSWERSASell only to commercial usersBSell only to home usersCSell to both home and commercial users at two pricesDNone of the aboveQUESTION:2[QUESTION BANK ID:93344]TYPE:MULTIPLE CHOICECORRECT<< HIDE ANSWERSAA will choose Black and B will choose PinkBA will choose Pink and B will choose PinkCA will choose Black and B will choose BlackDA will choose Pink and B will choose Black
QUESTION:3[QUESTION BANK ID:57522]TYPE:MULTIPLE CHOICECORRECT<< HIDE ANSWERSA$11.25B$12.50C$13.75D$15QUESTION:4[QUESTION BANK ID:80058]TYPE:MULTIPLE CHOICEINCORRECTThe owner of Bob’s Breakfast just bought Nancy’s Famous Breakfast across the street. They offer the same breakfast items on the menu. The demand for Bob’s Breakfast is more elastic than Nancy’s Famous Breakfast. What should the owner do?<< HIDE ANSWERSAReduce the prices at Nancy’s Famous BreakfastBRaise the prices at Bob’s BreakfastCRaise the prices at both restaurants equallyDRaise the prices at both restaurants, but raise the price of Bob’s Breakfast moreQUESTION:5[QUESTION BANK ID:125305]TYPE:MULTIPLE CHOICECORRECTIn a principal-agent relationship, the principal’s goal is to<< HIDE ANSWERSA
Control the agentBPay the agentCAlign agent’s incentives with principal’s goalsDEradicate shirkingQUESTION:6[QUESTION BANK ID:37567]TYPE:MULTIPLE CHOICECORRECTYou are considering entry into a market in which there is currently only one producer (incumbent). Entry will require $20k in fixed costs per year (avoidable at the end of each year). If you enter, the incumbent can take one of two strategies, price low or price high. If they price high, then you expect a $60k profit peryear. If they price low, then you expect a $20k loss per year. You should enter if you believe:<< HIDE ANSWERSADemand is inelasticBThe probability that the incumbent will price low is greater than 0.75CThe probability that the incumbent will price low is less than 0.75DThe entry decision depends on the size of the marketQUESTION:7[QUESTION BANK ID:115641]TYPE:MULTIPLE CHOICECORRECTA video store believes there are two equally sized consumer groups with different values for two DVDs as