Consider Three Pricing Strategies That the Firm Can Pursue

question 10

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 is most beneficial to society as a whole?

• A) Both perfect price discrimination and a two-part tariff pricing are equally beneficial in that the marginal benefit of the last unit sold equals the marginal cost of producing that unit.
• B) only perfect price discrimination because this pricing method eliminates deadweight loss
• C) single-price monopoly pricing because consumers enjoy at least some consumer surplus
• D) only two-part tariff pricing because the per-unit portion of the price is set equal to marginal cost

Explain how the trading of shares impacts a corporation, including the effects on share capital and financial position.

Understand the different reasons a company might issue shares, repurchase its own shares, or undergo a stock split.

Recognize the legal and financial implications of shareholder liability and corporate governance, including the role of the board of directors.

Identify how the market perceives and values a corporation, including market capitalization and the factors influencing share prices.

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Definitions:

Otoscopic Examination

A visual examination of the ear canal and eardrum using an otoscope, an instrument designed for looking into the ear canal.

Injected Membrane

Typically refers to a membrane or tissue that appears red due to an increased blood supply, often as a response to inflammation or infection.

Oblique Position

A body position where the individual is lying on their side with the body angled so that the front is neither completely exposed nor completely hidden.

Thick and Opaque

Descriptive terms indicating something dense and not allowing light to pass through, often used in reference to materials or fluids.