Hammacher Schlemmer Hammacher Schlemmer is a chain of retail stores famous for introducing a steady flow of innovative new products to customers. When it negotiates for a new product, it often requires that it will get the exclusive rights to retail it for a year or two. Why is it advantageous to the supply chain for there to be an exclusive dealer and why for only a few years?
QUESTION 2For a firm to maximize total profits through price discrimination, it should
a. Firms should charge a low price to high-value consumers and a high price to low-value consumers
b. Firms should charge a high price to high-value consumers and a high price to low-value consumers
c. Firms should charge a low price to high-value consumers and a low price to low-value consumers
d. Firms should charge a high price to high-value consumers and a low price to low-value consumers
QUESTION 3If a consumer purchases only two goods (x and y) and the demand for x is elastic, then a rise in the price of x:
a. will cause total spending on good y to rise.
b. will cause total spending on good y to fall.
c. will cause total spending on good y to remain unchanged.
d. will have an indeterminate effect on total spending on good y.
QUESTION 4Of the following, which is not an economic rationale for public utility regulation?
a. production process exhibiting increasing returns to scale
b. constant cost industry
c. avoidance of duplication of facilities
d. protection of consumers from price discrimination
e. none of the above
QUESTION 5Outlet Malls Coach Handbags sells its purses through traditional department stores and specialty shops. But it sells discounted bags through Coach Brand shops at outlet malls. Why does it own the outlet mall stores but not the stores at the traditional department stores and specialty shops?
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