1. A Broadway theater sells weekday show tickets at a lower price than for a wee

ID: 1225865 • Letter: 1

Question

1. A Broadway theater sells weekday show tickets at a lower price than for a weekend show. This is an example of:

price discrimination.

peak-load pricing.

price discrimination or peak-load pricing.

None of the statements is correct.

2. Predatory pricing is a strategy:

- whereby an incumbent maintains a price below the monopoly level to prevent entry by potential competitors.

- whereby a firm enjoys lower costs due to knowledge gained from its past production decisions.

- whereby a firm temporarily prices below its marginal cost to drive competitors out of the market.

- used by a vertically integrated firm to squeeze the margins of its competitors.

1. C is Correct, It is an Example of Both Price Discrimination and Peak Load Pricing

2. C is Correct, is an act of selling at low in order to eliminate competitors.

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