Question

Please make sure they are correct. Thank You,

43. With regard to elasticities of demand:

-   price decreases result in revenue decreases if demand is price elastic.

-   price elasticity = % change in price divided by % change in quantity.

-   price elasticity should actually be the sole basis for pricing decisions.

45. If competitive market circumstances are such that there is some leader-follower price competition, some product differentiation, and the purpose of advertising is to inform, but avoid price competition, then we must be operating in a(n):

-   monopolistic competition.

-   pure competition.

-   oligopoly.

-   pure monopoly.

53. Price discrimination is legal under which of the following conditions?

-   if a seller advertises prices that are not actually available to consumers

-   if a seller can prove its costs per unit are different when selling to different retailers

-   when a manufacturer and reseller have agreed upon a specified retail price for a product

-   when a manufacturer sells to retailers in different markets

54. More than 20 stores on a street in Sao Paulo that specialize in selling the same quality and brand of wheat products. An individual seller cannot charge more than the going market price without the risk of losing business to the other stores. What type of market does this example represent?

-   oligopolistic competition

-   pure monopoly

-   pure competition

-   monopolistic competition

Answer 1

Answer 43: Option B

Explanation: With regard to the elasticity of demand, price elasticity = % change in price divided by % change in quantity.

Answer 45: Option B      

Explanation: If competitive market circumstances are such that there is some leader-follower price competition, some product differentiation, and the purpose of advertising is to inform but avoid price competition, then we must be operating in pure competition.

Answer 53: Option A

Explanation: Price discrimination is legal under the condition - if a seller can prove its costs per unit are different when selling to different retailers.

Answer 54: Option C

Explanation: More than 20 stores on a street in Sao Paulo that specialize in selling the same quality and brand of wheat products. An individual seller cannot charge more than the going market price without the risk of losing business to the other stores. This represents pure competition.