The most-favored customer is one who:
a. buys a firm's product regularly.
b. is an acquaintance of the owner of a firm.
c. is guaranteed to receive the lowest price for a product.
d. spends the maximum amount of money on a firm's product.
e. has a high purchasing power.
QUESTION 2If you must make a choice about consuming two apples, three oranges, or one candy bar, the opportunity cost of the two apples is the candy bar plus the three oranges.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 3When firms use cost-plus pricing in a market,
a. each firm determines its price based on other firms' costs and prices.
b. it may appear as though firms are colluding in price when they actually are not.
c. prices of different firms diverge widely.
d. each firm falls short of maximizing profit as they charge the same price irrespective of their costs.
e. each firm sells only to its most-favored customer.
QUESTION 4If you have a choice between consuming bundle X or bundle Y, the opportunity cost of consuming bundle X is bundle Y.
a. True
b. False
Indicate whether the statement is true or false
QUESTION 5Actions that allow oligopoly firms to coordinate their pricing behavior without explicit collusion are referred to as _____.
a. strategic behavior
b. differential pricing strategies
c. facilitating practices
d. duopoly price discrimination mechanisms
e. independent practices
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