Retailers should set relatively lower prices for frequently purchased,
relatively standard items like eggs, milk, etc. What is the reason for this?
A. Because consumers use the prices of "signpost" items to form an
overall impression of a store's prices.
B. Because consumers have left-digit bias
C. Because price affects quality perception
D. Because aggregation makes people perceive it larger
Company ABC uses an incentive-aligned choice experiment to estimate the
demand curve of its product. It test five different price point: $9, $19, $29,
$39, $49. Following the rule of thumb, they recruit 30 respondents for each
price point. After all respondents make the choice, they randomly select 1/50
of them to give the budget and make these respondents choice realized.
Which of the following is a proper budget to give to a respondent if the
What is the cost of this choice experiment?
30*5*(1/50)*50 = 150
Given the results of the incentive-aligned choice experiment, the estimated
demand curve of the product is Q(p)=M*(1-0.02p), where the market size
M=10,000. The variable cost of producing and selling a product is $20. What is
the profit-maximizing price?
2 ∗ 0.02
The fixed cost of producing the product is 20000. Should company ABC produce
1 − 0!
35 − 20 ∗ 10000 ∗
1 − 0.02 ∗ 35 − 20000 = 25000
Yes, company ABC should produce the product.
A TV channel has an official account on Twitter. Every day the official
account posts tweets with the information about the shows that will be
broadcast on the channel. What format of promotion does this belong to?
A. Traditional advertising
B. Direct marketing
C. Sales promotion
D. Personal selling