Economic theory predicts that a profit maximizing car rental agency with some market power would set its prices in what way?
a. Charge the same for both weekday and weekend rentals.
b. Charge more for weekend rentals and less for weekday rentals.
c. Charge more for rentals during the week and less for weekend rentals.
c. Charge more for rentals during the week and less for weekend rentals. Apply concept of price discrimination to another market.
You might also like to view...
Refer to Figure 14-2. If the government delays Gigacom's entry and Xenophone moves first, is a threat by Gigacom that it will provide DSL service if Xenophone provides cable service a credible threat?
A) No, because Gigacom will lose $4.5 million in profits if it carries out its threat. B) Yes, Xenophone stands to lose $3 million in profit. C) Yes, because Gigacom's DSL service will drive Xenophone out of business. D) No, because as a second mover, it has no choice but to abide by the choices of the first mover.
If the inflation rate turns out to be greater than was is expected to be, the clear losers are
A. businesses. B. people on incomes adjusted by a COLA. C. borrowers. D. lenders.
For a country with a fixed exchange rate, a monetary shock will have a smaller impact on the domestic economy than will a comparable domestic spending shock.
Answer the following statement true (T) or false (F)
Which of the following is a flow variable?
A) income B) money C) financial wealth D) all of the above E) none of the above