Dremel Tools Dremel sells a high speed rotary tool appropriate for many workshop projects. They have developed hundreds of accessories and bits for their tools for many different applications. Why is the markup on the accessories higher than the markup on the rotary tools?
Dremel is engaging in a form of metering. Purchasers differ in their willingness to pay for the continued use of the system. Those who value it a lot will purchase many different accessories. Those who have lower willingness to pay are going only get the more basic bits. So, a higher margin for the accessories allows Dremel to extract more of the surplus from the high types without losing the low types.
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A public recreation area that has become unpleasantly crowded is exhibiting a negative externality that is frequently associated with:
A. bargaining. B. Pigouvian policies. C. public goods. D. common property resources.
The above figure shows the market for a particular good. If the market is controlled by a perfect-price-discriminating monopoly, compared to a monopoly who charges a single price, the change in total surplus is
A) A + B + C. B) A + B + D. C) A. D) C + E.
Economic discrimination against minorities exists when
A) minorities have less education and training than whites. B) minorities are paid less than whites on average. C) minorities are paid less than whites with the same education, experience, and training. D) minorities are in different occupations than whites.
If a firm produces 10 units, TC=$100 . When the firm increase its output to 15 units, TC= $150 . The firm's variable costs equal to
a. $50 b. $150 c. $25 d. $100