Bissoy.com
Doctors Medicines MCQs Q&A

Identify three conditions that a firm must meet to practice price discrimination: A. The firm must have some control over the price and the product B. The firm must operate in the growth phase of its product life cycle C. The markets in which products are sold must be separable D. Price elasticity of demand for the product must differ E. The firm operates its plant at full capacity Choose the correct answer from the options given below:

Identify three conditions that a firm must meet to practice price discrimination: A. The firm must have some control over the price and the product B. The firm must operate in the growth phase of its product life cycle C. The markets in which products are sold must be separable D. Price elasticity of demand for the product must differ E. The firm operates its plant at full capacity Choose the correct answer from the options given below: Correct Answer A, C and D only

The correct answer is A, C and D only.

Key Points

Price discrimination:

Price discrimination occurs when a seller charges different rates for the same good or service to different customers for reasons unrelated to variations in cost.

Important PointsConditions that a firm must meet to practice Price Discrimination

  • The seller must have some degree of control over the product's supply. It takes monopoly strength like this to differentiate prices.
  • The market should be split into at least two submarkets by the seller (or more).
  • The product's price elasticity must vary depending on the market. Therefore, the monopolist can set a high price for those purchasers whose price-elasticity of demand for the product is less than 1.
  • In other words, even if the supplier raises the price, these customers do not cut back on their purchases.
  • The product shouldn't be able to be sold to customers from the high-priced market by low-priced customers.

Related Questions

Arrange the sentences in the correct order to form a meaningful sequence. 1. Globalisation refers to the integration of markets in the global economy.  P. Developments in ICT, transport and communications have accelerated the pace of globalisation over the past 30 years.  Q. It leads to the increased interconnectedness of national economies. R. The globalisation of sport and entertainment is also a feature of the late 20th and early 21st centuries. S. Markets where globalisation is particularly common include financial markets, such as capital markets, money and credit markets, and insurance markets, commodity markets etc. 6. The internet has enabled fast and 24/7 global communication, and the use of containerisation has enabled vast quantities of goods and commodities to be shipped across the world at extremely low cost.
In the question below, are given a statement followed by three courses of actions numbered I, II and III. On the basis of the information given, you have to assume everything in the statement to be true, and then decide which of the suggested courses of action logically follow(s) for pursuing. Statement: India’s pharmaceutical sector is now popping out from a shell and making a remarkable recovery. Actually, it has been facing several regulatory challenges in the forms of a recast of foreign direct investment (FDI) policy, pricing policy in the US generics market, patent protection, regulatory approvals and compulsory licensing. Also limited new product launches in the generics space, GST introduction and higher costs associated with regulatory compliance have hurt the sector. Courses of action: I. The government has been engrossed more in policy making and taking resilient decisions for the concerns of the pharma industry. Recently, the government proposed to introduce a new price index for pharmaceutical products, which would serve as a benchmark for determining prices of all medicines sold in the country. II. Meanwhile, pharma companies’ constant investments in R&D have enabled them to develop a basket of robust products for markets across the world. In international markets, pricing pressure on generics sold in the US has eased and this is likely to support the sector. III. Domestic pharma sales grew to Rs. 10,583 crore in May 2018 from Rs. 9,549 crore in the same month last year. The recent clearance by the US Food and Drug Administration to Sun Pharma’s manufacturing plant at Halol in Gujarat brings to an end a two-year import ban it had imposed on the company over quality issues. This is likely to increase sales for the company.
The question below consists of a set of labelled sentences. Out of the four options given, select the most logical order of the sentences to form acoherent paragraph.
P: The recent reduction in interest rates in the US and the injection of liquidity have resulted in investors seeking new avenues such as commodity markets, in view
of the turbulence in financial markets and the low returns in treasuries.
Q: The relatively easy liquidity and low interest rates, by themselves, make holding of inventories attractive and thus induce volatility in commodity markets.
R: The financialisation of commodity trade and current extraordinary conditions in global financial markets could have influenced the spurt in prices.
S: The weakening of the US dollar is also advanced as a reason for the recent volatility in commodity markets, including food items.
Match List I with List II: List I (Pricing Strategies) List II (Description) (A) Ramsay pricing (I) Setting a high price when a product is first introduced and gradually lowering price as it gains scale (B) Price skimming (II) Firm charges lower price (than the ongoing price) to gain market entry (C) Cost plus pricing (III) Price deviations from marginal cost should be inversely proportional to price elasticity of the product (D) Penetration pricing (IV) It is full cost pricing strategy that also includes mark up for target return, degree of competition, price elasticity and availability of substitutes. Choose the correct answer from the options given below:
Consider the following statements.
1. A profit maximising monopolist in different markets will adjust his sales in the two markets, so that his MR in each market just equals his MC.
2. A profit maximising monopolist in separate markets will not adjust his sales.
3. A profit maximising monopolist in separate markets will adjust his sales in the two markets, so that his MR in each market will greater than MC.
4. A profit maximising firm in separate markets will adjust his sales in each market so, that his MR is less than MC.
Which of the statement(s) given above is/are correct?
Given below are three quantities named 1, 2 and 3. Based on the given information, you have to determine the relationships between the three quantities. You should use the given data and knowledge of Mathematics to choose between the possible answer. The options represent the relations among the three quantities. A. < B. > C. ≤ D. ≥ E. = Quantity 1: A shopkeeper earns a profit of 24% if he sells a product for Rs.186. What will be his profit percentage, if he sells the product for Rs.180? Quantity 2: A shopkeeper marks the price of a product 50% above its cost price and sells it at a discount of 20%. What is his profit percentage? Quantity 3: Mahesh sold a laptop to Shyam making a profit of 10%. Shyam sold it to Keshav making a profit of 12%. Keshav sold the laptop to Shital at a profit of 15%. By how much percentage the price of the laptop is increased?
The figure shows the revenue generated over different product life cycle stages marked as P, Q, R and S. Group I lists these product life cycle stages. Group II lists typical efforts leading to revenue maximization during a stage. Group I Group II P. Introduction 1. Efforts to enhance the production capacity Q. Growth 2. Efforts to rejuvenate the product R. Maturity 3. Efforts to maximize the product performance S. Decline 4. Efforts to explore other markets Match the stage with the efforts.
A passage is given with 5 questions following it. Read the passage carefully and choose the best answer to each question out of the four alternatives. Due to poor rainfall over the past few months, the vadu mangai season is expected to be short this year. There are two distinct varieties available in the vicinity of Coimbatore. The closest to Coimbatore, and the one that appears in the markets first, is the Thadagam variety. The second and more popular variety is the one from the Thirumoorthy Hills, near Udumalpet. Representatives from commercial pickle brands whisk these mangais away in big lots directly from the wholesalers. Only a small portion of the year's harvest trickles down to the local markets. Small vendors bring sacks full of these tiny tender mangoes to one particular street corner in Ram Nagar during the season. The corner of Rajaji Road and Sathyamurthy Road plays host to these vendors from as early as 7.00 am every day. Depending on the quantity they have, the mangais are available until around 11.00 am. If the vendors have a good day and their produce is sold quickly, they pack up and leave even as early as 9.00 am. Why do local markets get only a small portion of the mango produce?
Given below are three quantities named A, B and C. Based on the given information, determine the relation among the three quantities. A shopkeeper bought two products X and Y from a company. He bought product X for Rs. 3060 and sold it to the customer earning a profit of 20%, while he sold the product Y to a customer for Rs. 4160, thereby earning a profit of 30%. Quantity A: If the company earned a profit of 20% on the product X, what is the manufacturing cost of product X? Quantity B: If the company earned a profit of Rs. 600 on the product Y, what is the manufacturing cost of product Y? Quantity C: What is the difference between the total price paid by the customers and the total manufacturing cost of the products X and Y?
The conditions regarding selection from a list of suitable candidates to be called for interview after a written examination for appointment of management-level persons to a multi-national company providing accounting services and sales are mentioned below. Candidates: a) Must have a Bachelor's degree in Basic Science with 65% or more marks or BE with 55% or more marks. b) Must have passed the examination with 70% or more marks. c) Age must be between 25 to 30 years as of 1/4/18. d) Must have 3 years of experience in an Accounting Institution and must have a Diploma in Accounting with 60% or more marks. e) Must be currently getting CTC of Rs. 6 lakh or more per annum. If the candidate: 1) If he fulfills all the other conditions other than A above, he will be designated as Junior Accountant. 2) If he fulfills all the other conditions other than (d) and (e) above, he can be designated as Trainee-Accountant. If he fulfills all the above conditions including 5 years of experience, he can be designated as a Senior Accountant. He can be designated as Manager (Accounts) if he fulfills all the above criteria including educational qualifications of CA/ ICWA/ MBA (Finance). Study all the above information and answer the following question. Varun has passed the CA exam and has a bachelor's degree in basic science and a diploma in accountancy, having scored 75% or more in the written examination during his entire career and also in the written examination. His age is 27 years and with 4 years of experience in Accountancy, he has a CTC salary of 18 lakhs per annum. To which of the following positions can he be referred? Select from the given options.