Author Question: Which of the following pricing strategies allows a firm to earn economic profit? A) charging a ... (Read 62 times)

ahriuashd · **on:** Jun 29, 2018

Which of the following pricing strategies allows a firm to earn economic profit?

A) charging a price equal to the average variable cost of production
B) charging a price equal to marginal cost
C) price discrimination
D) charging a price equal to the average total cost of production

Question 2

Refer to Figure 14-5. If Netflix lowers its price, will this deter Spotify from setting up a streaming video service?

A) no, because Spotify will make a larger profit than Netflix if it chooses to compete
B) yes, because Spotify stands to lose 1 million if it competes with Netflix
C) no, because Spotify will make a profit if it competes with Netflix
D) yes, because Spotify will make a smaller profit than Netflix if it chooses to compete

dyrone · **Reply #1 on:** Jun 29, 2018

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