All of the following are true, except
a. Some consumers may infer high quality from high price
b. Low prices can indicate lower quality given that no other information is available
c. Promotional campaigns do not affect consumer's perception on quality
d. It makes more sense to raise price when advertising makes demand less elastic
c
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Why do necessities tend to have demand that is price inelastic, while luxuries tend to have demand that is price elastic?
What will be an ideal response?
Some grocery stores are now offering customers coupons which entitle them to a discount on certain items on their next visit when they go through the check-out line. This practice is an example of:
A) intertemporal price discrimination. B) third-degree price discrimination. C) a two-part tariff. D) bundling. E) none of the above
The supply curve of reserves has two kinks in it: one at the _________________ and the other at the ____________________ rate
A) interest rate that the Fed pays on reserves; discount B) federal funds rate; discount C) prime rate; discount D) discount rate; federal funds rate
Refer to the information provided in Figure 5.3 below to answer the question(s) that follow.
Figure 5.3Refer to Figure 5.3. Use the midpoint formula. If the price of a gardenburger increases from $6 to $8, the price elasticity of demand equals ________ and demand is ________.
A. -2.0; elastic B. -1.75; elastic C. -0.57; inelastic D. -1.9; inelastic