Which is not an example of price discriminating by separating markets?
a. offering discounts for students with IDs.
b. charging lower prices for airline tickets with a Saturday stay-over.
c. selling 13 bagels (a baker's dozen) for the price of 12.
d. selling snowblowers at a discount in relatively warmer climates.
QUESTION 2The Soup Nut serves his signature minestrone soup in two different bowl sizes, large and small. What strategy should he use to extract the most surplus possible out of customers who come in two types, regular and big eaters, when he cannot distinguish between the two types by observation?
a. Distort the size of the small bowl downward to make it less attractive to the big eaters, allowing him to raise the price of the large bowl.
b. Distort the size of the large bowl downward to make it attractive to both big and regular eaters.
c. Distort the size of the small bowl upward to make it harder for regular eaters to separate themselves from big eaters.
d. Distort the size of the large bowl upward to make big eaters less likely to consume the small bowl.
QUESTION 3A monopolist has total cost TC = Q2 + 10Q + 100 and marginal cost MC = 2Q + 10 . It faces demand Q = 130- P (so its marginal revenue is MR = 130 - 2Q). Its profit-maximizing output
a. 30
b. 25
c. 20
d. 10
QUESTION 4Consider the same monopoly situation as in the previous question. The deadweight loss (compared to a single firm behaving as if it were perfectly competitive) is about
a. 667
b. 333
c. 1,000
d. 1,333
QUESTION 5Consider the same monopoly situation as in the previous question. The firm's profit will be
a. 1,760
b. 1,660
c. 2,264
d. 6,728
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