G202 EXAM 2 IU KREFT ACTUAL
EXAMINATION 2026 QUESTIONS WITH
ANSWERS GRADED A+
⫸ You are the manager of a movie theater that is the only one in a local
market, so you have strong market power. You have extensively
researched your customer base and realize you have two types of
segmentable customers: (i) students who have an elasticity of demand
for movies of -2.7 and (ii) senior citizens who have an elasticity of
demand for movies of -5.1. Which of the following pricing schemes
would you employ to enhance profits?
a) Set higher prices to the students as their demand is relatively more
elastic.
b) Set higher prices to the senior citizens as their demand is relatively
more elastic.
c) Set higher prices to the senior citizens as their demand is relatively
more inelastic.
d) Set higher prices to the students as their demand is relatively more
inelastic. Answer: d) Set higher prices to the students as their demand is
relatively more inelastic.
⫸ Which of the following is the correct stakeholder hierarchy of the
USLP?
a) Society—Employees—Shareholders—Consumers.
b) Shareholders—Consumers—Society—Employees.
c) Employees—Shareholders—Consumers—Society.
,d) Consumers—Society—Employees—Shareholders. Answer: d)
Consumers—Society—Employees—Shareholders.
⫸ Below is a table of information on a local monopolist's Sales
Quantity, Price, and Total Cost.
What is the monopolist's socially efficient quantity (Qe)?
a) 2.
b) 5.
c) 3.
d) 4. Answer: b) 5.
⫸ How will the monopolist's output and price (Qm and Pm) compare to
the socially efficient output and price (Qe and Pe) in any given market?
a) Qm<Qe and Pm<Pe.
b) Qm<Qe and Pm>Pe.
c) Qm>Qe and Pm<Pe.
d) Qm>Qe and Pm>Pe. Answer: b) Qm<Qe and Pm>Pe.
⫸ When compared to the efficiently competitive industry, the firm with
significant market power produces
a) too many units, as some units produced will have more productive
costs than consumer value.
b) too many units, as some units produced will have more consumer
value than productive costs.
, c) too few units, giving up some units that would normally have more
consumer value than productive cost.
d) too few units, giving up some units that would normally have more
productive cost than consumer value. Answer: c) too few units, giving
up some units that would normally have more consumer value than
productive cost.
⫸ What is the result of Unilever's USLP differentiation strategy?
a) Unilever produces too few units, giving up some units that would
normally have more productive cost than consumer value.
b) Unilever only thinks about the short-term profit from their
differentiation efforts.
c) Unilever sets a sales target where D=MC and then markup price over
costs according to demand for the firm's product.
d) Unilever sets higher prices to their shoppers as their demand is
relatively more inelastic. Answer: d) Unilever sets higher prices to their
shoppers as their demand is relatively more inelastic.
⫸ Which of the following is not one of the potential pros of doubling
down on the USLP?
a) Employees are motivated by the incentive structures of the USLP and
are driving product innovation.
b) Customers responded to the culture of social accountability under the
USLP by increasing their brand loyalty.
c) There are diminishing returns to expanding the USLP beyond the
brands considered to be low-hanging fruit.
EXAMINATION 2026 QUESTIONS WITH
ANSWERS GRADED A+
⫸ You are the manager of a movie theater that is the only one in a local
market, so you have strong market power. You have extensively
researched your customer base and realize you have two types of
segmentable customers: (i) students who have an elasticity of demand
for movies of -2.7 and (ii) senior citizens who have an elasticity of
demand for movies of -5.1. Which of the following pricing schemes
would you employ to enhance profits?
a) Set higher prices to the students as their demand is relatively more
elastic.
b) Set higher prices to the senior citizens as their demand is relatively
more elastic.
c) Set higher prices to the senior citizens as their demand is relatively
more inelastic.
d) Set higher prices to the students as their demand is relatively more
inelastic. Answer: d) Set higher prices to the students as their demand is
relatively more inelastic.
⫸ Which of the following is the correct stakeholder hierarchy of the
USLP?
a) Society—Employees—Shareholders—Consumers.
b) Shareholders—Consumers—Society—Employees.
c) Employees—Shareholders—Consumers—Society.
,d) Consumers—Society—Employees—Shareholders. Answer: d)
Consumers—Society—Employees—Shareholders.
⫸ Below is a table of information on a local monopolist's Sales
Quantity, Price, and Total Cost.
What is the monopolist's socially efficient quantity (Qe)?
a) 2.
b) 5.
c) 3.
d) 4. Answer: b) 5.
⫸ How will the monopolist's output and price (Qm and Pm) compare to
the socially efficient output and price (Qe and Pe) in any given market?
a) Qm<Qe and Pm<Pe.
b) Qm<Qe and Pm>Pe.
c) Qm>Qe and Pm<Pe.
d) Qm>Qe and Pm>Pe. Answer: b) Qm<Qe and Pm>Pe.
⫸ When compared to the efficiently competitive industry, the firm with
significant market power produces
a) too many units, as some units produced will have more productive
costs than consumer value.
b) too many units, as some units produced will have more consumer
value than productive costs.
, c) too few units, giving up some units that would normally have more
consumer value than productive cost.
d) too few units, giving up some units that would normally have more
productive cost than consumer value. Answer: c) too few units, giving
up some units that would normally have more consumer value than
productive cost.
⫸ What is the result of Unilever's USLP differentiation strategy?
a) Unilever produces too few units, giving up some units that would
normally have more productive cost than consumer value.
b) Unilever only thinks about the short-term profit from their
differentiation efforts.
c) Unilever sets a sales target where D=MC and then markup price over
costs according to demand for the firm's product.
d) Unilever sets higher prices to their shoppers as their demand is
relatively more inelastic. Answer: d) Unilever sets higher prices to their
shoppers as their demand is relatively more inelastic.
⫸ Which of the following is not one of the potential pros of doubling
down on the USLP?
a) Employees are motivated by the incentive structures of the USLP and
are driving product innovation.
b) Customers responded to the culture of social accountability under the
USLP by increasing their brand loyalty.
c) There are diminishing returns to expanding the USLP beyond the
brands considered to be low-hanging fruit.
