Question

1. The production era is known for high producer concern for consumer preferences and behavior.
2. Inferior goods are goods that you buy more of when your income increases. They are basically inferior because you cannot buy them when you have a low income.
3. Price skimming can be considered a type of price discrimination.
4. Every firm can maximize profits by producing at the point where marginal cost equals marginal revenue (MR=MC). This holds true regardless of the market structure (perfect competition, monopoly, etc.)
5. Direct selling is characterized by a short food value-added chain as the grower usually sells the product directly to the end consumer.

Answer 1

1) FALSE ( Production Era is the time frame that started from after the U.S. Civil War period and continued until the 1920's during which time the primary goal of many corporations was to lower manufacturing costs.)

2) FALSE ( When income increases we buy less of inferior goods , they are inferior because you are forced to use them when yu have very low income )

3) TRUE ( Price skimming is a product pricing strategy by which a firm charges the highest initial price that customers will pay at first . As the demand of the first customers is satisfied, the firm lowers the price to attract another and then another , more price-sensitive segment. Thus it is a type of price discrimination )

4) TRUE ( Profit maximization occurs when MR = MC , profit max : dP / dQ = 0 . dTR / dQ - dTC/dQ = 0 , MR = MC )

5) TRUE ( Less intermediate sellers )