Which of the following is a reason for firms to bundle products?
A. To clear the old stock of the product
B. To extract additional profit from a customer base with heterogeneous product demand
C. To increase customer welfare and satisfaction
D. To extract additional profit by charging higher prices for the goods in a bundle
Answer: B
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Which of the following is true of a recessionary period?
a. It is usually accompanied by an improvement in the value of an economy's currency. b. It is usually accompanied by low levels of inflation c. It is usually accompanied by a dramatic decline in the stock of inventories. d. It usually lasts for a few months. e. It leads to a drastic decline in government spending.
Suppose a shortage for good X exists. Given this information, we know that
A. a government price floor should be imposed above the current price so that the market can work more effectively. B. a government price ceiling should be imposed above the current price so that the market can work more effectively. C. the price of good X will tend to rise toward the equilibrium level. D. the price of good X will tend to fall toward the equilibrium level.