1. Cost-plus pricing is a common practice in many industries (especially retail). It will be effective in terms of approximating the profit-maximising price, provided that:

Select one:

a. the manager setting the price has a fundamental understanding of their market.

b. demand is inelastic at the profit-maximising price.

c. the firm can exploit its economies of scale.

d. All of these are correct.

2. Which of the following pricing strategies could NOT maximise profits?

Select one:

a. Two-part pricing.

b. Block pricing.

c. Menu pricing.

d. Any of these pricing strategies could maximise profits.

3. Which of the following is an example of block pricing?

Select one:

a. Jenny pays her landlord separately for rent and for electricity.

b. Trevor goes to the movies with his partner, and receives a discount because he is a student.

c. Paula buys a pack of eight candles, because it is cheaper than buying each candle individually.

d. Brian pays his golf membership in monthly installments.