Consider Three Pricing Strategies That the Firm Can Pursue

question 53

Multiple Choice

Consider three pricing strategies that the firm can pursue:
a. optimal two-part tariff pricing
b. perfect price discrimination
c. single-price monopoly pricing
Of these three strategies, which method gives the firm the highest profit?

• A) optimal two-part tariff pricing
• B) perfect price discrimination
• C) single-price monopoly pricing
• D) The profit is the same under optimal two-part tariff pricing and perfect price discrimination and the profit is higher than under single-price monopoly pricing.

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Definitions:

Cognitive Dissonance

The uncomfortable feeling people experience when they have two thoughts or cognitions conflict with one another.

Attitude Polarization

The phenomenon by which an individual's stance on an issue becomes more extreme after considering evidence or arguments.

Show Attitude

The demonstration of one's feelings, beliefs, or disposition through verbal and non-verbal forms of expression.

Biased Manner

A way of acting or making decisions that is influenced by prejudices or partiality, rather than being fair or impartial.