Suppose That a Monopolist Is Considering Two Different Pricing Schemes

question 193

Multiple Choice

Suppose that a monopolist is considering two different pricing schemes: offering the good at $100 per unit with a $10 rebate coupon,or just charging a flat $90 per unit.His economic consultant would advise him to

• A) charge the $90 price.
• B) charge the $100 price and "misplace" most of the rebate coupons.
• C) charge the $100 price because less than 100% of the buyers will mail in the rebate.
• D) do either;the impact will be the same.
• E) charge the $90 price because most consumers ignore rebate offers.

Examine the role and impact of regulatory agencies in industrial regulation.

Analyze the effects of mergers and acquisitions on market competition and regulation.

Identify the economic and social arguments for and against the regulation of industries.

Understand the concepts of Herfindahl index and its relevance in antitrust regulation.

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Definitions:

Loyal Buyers

Consumers who repeatedly purchase the same brand or product, demonstrating fidelity and consistent preference over time.

Ancillary Services

Additional services or benefits provided beyond the primary product or service, often enhancing customer experience or value.

Promotional Mix

The combination of communication tools an organization uses to convey a clear, consistent, and compelling message about its brand and products.

Buyer Confidence

The degree of optimism that consumers feel about the overall state of the economy and their personal financial situation.