(Table: Maximum Willingness to Pay III) the Marginal Cost of a One-Night

question 104

Multiple Choice

(Table: Maximum Willingness to Pay III) The marginal cost of a one-night stay and one round of golf are $50 and $10, respectively. Which of the following statements is (are) TRUE? I. If a firm is using a pure bundling strategy, the bundle price should be set at $230 to maximize producer surplus.
II) Suppose a firm uses the following mixed bundling strategy: the bundle price is $240, or the price for a one-night stay is $180 and the price per round of golf is $80. With this strategy, producer surplus is $380.
III) If a firm prices each item separately such that the price for a one-night stay is $100 and the price per round of golf is $50, producer surplus will be $270.

• A) I, II, and III
• B) II and III
• C) I and III
• D) I

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Definitions:

Classical Conditioning

A learning process that occurs through associations between an environmental stimulus and a naturally occurring stimulus, famously demonstrated by Ivan Pavlov.

Learning Fear

The process by which living beings acquire a fear response to a previously neutral stimulus through conditioning.

Shoelaces

Shoelaces are a commonly used tool for fastening shoes, utilized to adjust the shoe's tightness and fit according to the wearer's preference.

Pavlov's Laboratory

The research facility where Russian physiologist Ivan Pavlov conducted his pioneering work on classical conditioning in the early 20th century.