« previous next »

Author Question: How do auctions help in price discovery? What will be an ideal ... (Read 19 times)

nramada

  • Hero Member
  • *****
  • Posts: 580
on: Jun 29, 2018
How do auctions help in price discovery?
 
  What will be an ideal response?

Question 2

Refer to Table 6-5. Katie Graham owns a kayak rental service in Santa Barbara. Table 6.5 shows her estimated demand schedule for kayak rentals per week. She would like to increase her sales revenue by changing the price she charges for rentals.
 
  At present she charges 75. Based on the information in the table, Katie
  A) should raise her price to 80 to increase her revenue because the demand for kayak rentals is price inelastic.
  B) should raise her price to earn the most revenue.
  C) should lower her price to 60 to increase her revenue because the demand for kayak rentals is price elastic.
  D) is not able to increase her revenue by changing her price because the demand for kayak rentals is unit elastic.


diana chang

  • Sr. Member
  • ****
  • Posts: 288
Reply #1 on: Jun 29, 2018
Answer to Question 1

Auctions help in price discovery for goods that do not have well-established prices. For example, for a good that may interest only a few buyers, like a painting, an auction might be a good way of discovering what the appropriate price will be and finding the right buyer. In general, it is common for goods that are unique, with relatively few buyers, to be auctioned.

Answer to Question 2

D


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

ACTH levels are normally highest in the early morning (between 6 and 8 A.M.) and lowest in the evening (between 6 and 11 P.M.). Therefore, a doctor who suspects abnormal levels looks for low ACTH in the morning and high ACTH in the evening.

Did you know?

Autoimmune diseases occur when the immune system destroys its own healthy tissues. When this occurs, white blood cells cannot distinguish between pathogens and normal cells.

Did you know?

In most cases, kidneys can recover from almost complete loss of function, such as in acute kidney (renal) failure.

Did you know?

Atropine, along with scopolamine and hyoscyamine, is found in the Datura stramonium plant, which gives hallucinogenic effects and is also known as locoweed.

Did you know?

Many people have small pouches in their colons that bulge outward through weak spots. Each pouch is called a diverticulum. About 10% of Americans older than age 40 years have diverticulosis, which, when the pouches become infected or inflamed, is called diverticulitis. The main cause of diverticular disease is a low-fiber diet.

Discovery of apoptosis in the adrenal cortex by Kerr, Wyllie, and Currie Discovery of apoptosis in the adrenal cortex by Kerr, Wyllie, and Currie
Aurora australis observed from the Space Shuttle Discovery, on STS-39, May 1991 (orbital altitude: 2 Aurora australis observed from the Space Shuttle Discovery, on STS-39, May 1991 (orbital altitude: 2
The grey side-gilled sea slug Pleurobranchaea maculata. The discovery of tetrodotoxin in this slug i The grey side-gilled sea slug Pleurobranchaea maculata. The discovery of tetrodotoxin in this slug i
Wheat and Cotton Prices and Consumer Price Indexes, 1865–1896 Wheat and Cotton Prices and Consumer Price Indexes, 1865–1896
What are examples of ideal forms? What are examples of ideal forms?
The discovery of the retinohypothalamic tracts. Neurons from each retina project to both ... The discovery of the retinohypothalamic tracts. Neurons from each retina project to both ...
Video: HDL (high density lipoprotein)

For a complete list of videos, visit our video library