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.

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