131 Answer True False Diff 2 Page Ref 532 533532 533 Topic Cost Plus Pricing

131 answer true false diff 2 page ref 532 533532 533

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131)Answer:TrueFalseDiff: 2Page Ref: 532-533/532-533Topic: Cost-Plus PricingLearning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies inoligopoliesAACSB: Reflective ThinkingESSAY. Write your answer in the space provided or on a separate sheet of paper.132) What is odd pricing? Why do some merchants use odd pricing?Answer: Odd pricing is the practice of charging prices that arenʹt round numbers, especially prices ending in 9 or5 rather than 0. One important reason for odd pricing is to give buyers the illusion that they are payingsignificantly less: $99.99 seems a lot less than $100 to some people.Diff: 2Page Ref: 531-532/531-532Topic: Odd PricingLearning Outcome: Micro 16: Discuss the functions of cooperation, competition, and public policies in oligopoliesAACSB: Reflective Thinking133) Many book publishers use cost-plus pricing to establish prices for some of their books. Would you expect apublishing company to use a strict cost-plus pricing system for all its books? How might you determine if apublishing company actually does use cost-plus pricing for all its books?134) Assume a firm is able to use an optimal two-part tariff.a. Is the outcome economically efficient? Why or why not?b. What happens to consumer surplus?c. Does this represent perfect price discrimination? Why or why not?
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  • Spring '11
  • Lee
  • Economics, Monopoly, AACSB, Nontotient, two-part tariff, optimal two-part tariff

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