ECON 315 SI- Final Exam Study Guide 1. T/F: When the demand during peak times is

Question

ECON 315 SI- Final Exam Study Guide 1. T/F: When the demand during peak times is high to the point that the quantity demanded is higher than quantity supplied, the firm will engage in peak-load pricing. The firm's exists where marginal cost equals marginal revenue during peak demand. Does the firm capture the entire consumer surplus using the following pricing strategies? If not. showcase the remaining consumer surplus through graphical representation: constraint 2. a. 1 st degree price discrimination b. 2nd degree price discrimination c. 3rd degree price discrimination d. Block pricing e. Peak-load pricing 3. If a firm's marginal cost is $30 and its price elasticity of demand-2, what is the profit maximizing price that the firm should charge? 4. Suppose P 40 2Q and MC-4. Find profit maximizing price, quantity, and profit under Monopoly, Duopoly, and Perfect Competition. of S. Suppose a market industry consists of 4 firms, marginal costs-$60, and the market elasticity demand--2. Find price. 6. You are the manage r of a monopoly. A typical consumer's inverse demand function for your firm's product is P - 250-100, and your cost function is C(a) - 5Q. Determine the optimal two- part pricing strategy 7. If Q-90-5P and MC ATC-2. Find price and quantity if firm engages in a block pricing strateg 8. Suppose a Bertrand Oligopoly market structure consists of 6 firms and their marginal cost-$400 and Q-100-P/2 Find equilibrium level of output. Determine the equilibrium market price. Determine profits for each firm. 9. Assume a Cournot Oligopoly market structure where the firms have different marginal costs. Suppose that MC1 is greater than MC2. Which firm will produce more quantity and in turn have higher profits, Firm 1 or Firm 2? Why? 10. T/F: The higher the markup factor the lower the price charged. 11. T/F: More elastic demand leads to lower price. 12. Which demand curve is relevant when a firm decreases their price? 13. T/F: A monopoly market structure experiences a higher deadweight loss than a perfectly competitive market structure. 14. Suppose that a man receives 4 job offers. Job A: $30,000 per year Job B:$60,000 per year Job C: $40,000 per year Job D: $50,000 per year What is the opportunity cost if the man chooses to work for himself?

Explanation / Answer

First question is answered below

1. True

Reason: Under peak load pricing, consumers are charged high prices during periods of high demand. This occurs because the monopolist aims to capture maximum consumer surplus and make maximum profits.

This occurs where MR = MC at each demand level.

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