Final Exam - NAME: SIGNATURE: Final Exam Introduction to...

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Unformatted text preview: NAME: SIGNATURE: Final Exam Introduction to Marketing: BUS 371 Professor Chakravarti INSTRUCTIONS. The questions on this exam are each worth the same number of points. You have 2 hours to complete the exam. Please keep your answers short and concise or you will not finish. Remember the object of this exam is to see how well you have absorbed the material at a conceptual level. Move on if you dont get a question immediately. There are a lot of short questions, dont overthink them! Answers that are long-winded and dont make sense will be penalized. Part I. Cost, Competition and Pricing Basics (Q1) Using the method discussed in class, describe how to derive a consumers maximum willingness to pay. (Q2) Imagine that you have a monopoly on the product that you sell. What is the rule that a monopolist uses to determine the quantity produced to maximize profit if it can only set one price (rather than price discriminate)? (Q3) What is the price charged to the consumer in a perfectly competitive market? Using the assumptions of perfect competition, explain intuitively how the market arrives at this price. Describe briefly one strategy that could allow a firm to escape from charging the perfectly competitive price. (Q4) Evaluate the validity of the following statement: you should always add in fixed costs when you evaluate margins. (Q5). Describe what it means to engage in first degree price discrimination (FDPD). Is FDPD easy or hard to perform in the market in general? Describe an example of how it is done in real life. (Q6) Imagine that a firm enters the market by attempting to compete with Microsoft in the Office productivity suite market (e.g., Word, Excel, Powerpoint). What is the main competitive problem that the firm must solve in order to unseat Microsoft? (Hint: the answer was given in class) (Q7) What is the fundamental difference between first-degree and second- degree price discrimination? Which method of price discrimination is more efficient?...
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Final Exam - NAME: SIGNATURE: Final Exam Introduction to...

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