Pricing policies Essay

1. In making promises that are not guaranteed by third parties and in imposing penalties that are not enforced by third parties, all of the following are credibility-enhancing mechanisms except 2. Essential components of a game include all of the following except: 3. A key to analyzing subgame perfect equilibrium strategy in sequential games is 4. When airlines post prices on an electronic bulletin board at 8:00 a.m. each morning, the decision-makers are engaged in 5. Credible promises and hostage mechanisms can support a continuous stream of cooperative exchanges except when 6. Firms that have a cover charge for their customers and charge for each item they purchase as well are exhibiting 7. The segmenting of customers into several small groups such as household, institutional, commercial, and industrial users, and establishing a different rate schedule for each group is known as: 8. Vacation tours to Europe invariably package visits to disparate regions: cities, mountains, and the seaside. Bundling, a type of second degree price discrimination, is most profitable when: 9. Which of the following pricing policies best identifies when a product should be expanded, maintained, or discontinued? 10. ____ is a new product pricing strategy which results in a high initial product price. This price is reduced over time as demand at the higher price is satisfied. 11. Which of the following is not among the functions of contract? 12. Mac trucks and their dealers would likely have an organizational form of 13. Contracts are distinguished from tactical alliances by which of the following characteristics: 14. Which of the following are not approaches to resolving the principal-agent problem? 15. When retail bicycle dealers advertise and perform warranty repairs but do not deliver the personal selling message that Schwinn has designed as part of the marketing plan but cannot observe at less than prohibitive cost, the manufacturer has encountered a problem of ____. 16. ____ occurs whenever a third party receives or bears costs arising from an economic transaction in which the individual (or group) is not a direct participant. 17. The antitrust laws regulate all of the following business decisions except ____. 18. The sentiment for increased deregulation in the late 1970’s and early 1980’s has been felt most significantly in the price regulation of 19. The Herfindahl-Hirschman index (also shortened to just the Herfindahl index) is a measure of 20. The lower the barriers to entry and exit, the more nearly a market structure fits the ____ market model. 21. If the acceptance of Project A makes it impossible to accept Project B, these projects are: 22. Cost-benefit analysis is the public sector counterpart to ____ used in private, profit-oriented firms. 23. The weights used in calculating the firm’s weighted-average cost of capital are equal to the proportion of debt and equity ____. 24. In order to help assure that all relevant factors will be considered, the capital-expenditure selection process should include the following steps except: 25. The social rate of discount is best approximated by: 1. Theoretically, in a long-run cost function: 2. The degree of operating leverage is equal to the ____ change in ____ divided by the ____ change in ____. 3. Which of the following is not an assumption of the linear breakeven model: 4. In the linear breakeven model, the breakeven sales volume (in dollars) can be found by multiplying the breakeven sales volume (in units) by: 5. In the linear breakeven model, the difference between selling price per unit and variable cost per unit is referred to as: 6. The short-run cost function is: 7. The problems of asymmetric information exchange arise ultimately because 8. A firm in pure competition would shut down when: 9. An â€Å"experience good† is one that: 10. In the purely competitive case, marginal revenue (MR) is equal to: 11. If price exceeds average costs under pure competition, ____ firms will enter the industry, supply will ____, and price will be driven ____. 12. Buyers anticipate that the temporary warehouse seller of unbranded computer equipment will 13. What is the profit maximization point for a firm in a purely competitive environment? 14. The practice by telephone companies of charging lower long-distance rates at night than during the day is an example of: 15. The demand curve facing the firm in ____ is the same as the industry demand curve. 16. Declining cost industries 17. Of the following, which is not an economic rationale for public utility regulation? 18. When the cross elasticity of demand between one product and all other products is low, one is generally referring to a(n) ____ situation. 19. Regulatory agencies engage in all of the following activities except _______. 20. Barometric price leadership exists when 21. A cartel is a situation where firms in the industry 22. The existence of a kinked demand curve under oligopoly conditions may result in 23. Some industries that have rigid prices. In those industries, we tend to 24. If a cartel seeks to maximize profits, the market share (or quota) for each firm should be set at a level such that the ____ of all firms is identical. 25. A(n) ____ is characterized by a relatively small number of firms producing a product.