64 more incentive incorrect 32 less not incentive

This preview shows page 9 - 12 out of 35 pages.

$64 more; incentive Incorrect $32 less; not incentive Incorrect $53 less; incentive Incorrect $41 more; not incentive (True Answer )Correct 611 Figure 10.6
Reference: Ref 10-7 (Figure 10.6) Little Pinehurst Miniature Golf has two types of customers: infrequent players and frequent players. Using a strategy of second-degree price discrimination, Little Pinehurst offers customers the choice of paying $15 per round of miniature golf or $12 per round for a package of 16 rounds. Which of the following statements is TRUE?
The pricing scheme is incentive-compatible for both groups of players. (
Suppose a firm has two types of customers but cannot tell which type of buyer a customer is before a purchase is made. One group of customers has an inverse demand of P= 100 10Q, while another group of customers has an inverse demand curve of P= 110 22.5Q. If the firm wanted to use a quantity discount pricing scheme, what prices should it set? Assume that the marginal cost of production is constant at $20. The firm could charge $65 per unit for any quantity purchased or $60 per unit if buying 4 or more units. (
613 Figure 10.7 Reference: Ref 10-8 (Figure 10.7) Suppose a firm has two types of customers but cannot tell which type of buyer the customer is before a purchase is made. If the firm wanted to use a quantity-discount pricing scheme, what prices should it set?The firm could charge $12 per unit for any quantity purchased or $4 per unit if buying 4 or more units. Incorrect The firm could charge $12 per unit for any quantity purchased or $7 per unit if buying 3 or more units, but the pricing scheme would not be incentive-compatible for Type B customers. (True Answer )Correct The firm could charge $7 per unit for any quantity purchased or $4 per unit if buying 2 or more units, but the pricing scheme would not be incentive-compatible for Type A customers. Incorrect The firm could charge $8.50 per unit for any quantity purchased or $4 per unit if buying 3 or more units. Incorrect

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture