Once again, more review questions. Any help would be great!
Question 1: Firms who are attempting to engage in price discrimination will offer customers with a ______demand a higher price and customers with a (an) _______ demand a lower price.
a. lower; higher.
b. normal; inferior.
c. less elastic; more elastic.
d. more elastic; less elastic.
Question 2: When a monopolist charges a low price to drive out competition, then charges a high price, the monopolist is engaging in:
a. a trust agreement.
b. a merger.
c. duopoly pricing.
d. predatory pricing
Question 3: Which of the following is most true about advertising?
a. Advertising has costs but no benefits.
b. There is no role for advertising for a firm in a perfectly competitive market.
c. Firms should advertise at a level where marginal benefit exceeds marginal cost.
d. Consumers are equally sensitive to advertising about all products
Question 4: When economies of scale are present, but are not sufficiently large to generate a natural monopoly, the expected market structure is:
a. monopoly.
b. monopolistic competition.
c. perfect competition.
d. oligopoly