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Understand Economics and Economic Systems 02.00
Understand Economics and Economic Systems 02.00

Midterm Exam - C.T. Bauer College of Business
Midterm Exam - C.T. Bauer College of Business

... 21. When we talked about stars, dogs, cash cows, and the like, we made the point that a. it is useful for a company to relocate periodically b. it makes sense to earn surplus cash with some products and invest that cash in other products c. tax considerations should be included in marketing decision ...
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... increases in product capacity produce lower unit costs by making additions to plant, equipment, labor force, or other facilities. While these additions to capacity generally produce upturns in fixed costs, these added production expenses are covered by improvements in per unit costs. 19. Delta belon ...
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... so will their MR curves and the profit-maximizing prices and quantities for each group. 3. For each segment of the market the monopolist will set output and price according to the MR = MC rule. 4. Firms realize greater profits, and students benefit from lower prices. Small businesses face higher pri ...
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Do Fish Need Demand Curves? - Professional Pricing Society
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... Yet for a tool that appears to answer two of the most important questions any manager might ask on behalf of his company, it sees very little use. Companies spend millions on consumer research, market scans and cost accounting, but rarely are these combined together into a demand curve for the marke ...
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Price discrimination

Price discrimination or price differentiation is a pricing strategy where identical or largely similar goods or services are transacted at different prices by the same provider in different markets. Price differentiation is distinguished from product differentiation by the more substantial difference in production cost for the differently priced products involved in the latter strategy. Price differentiation essentially relies on the variation in the customers' willingness to pay.The term differential pricing is also used to describe the practice of charging different prices to different buyers for the same quality and quantity of a product, but it can also refer to a combination of price differentiation and product differentiation. Other terms used to refer to price discrimination include equity pricing, preferential pricing, and tiered pricing. Within the broader domain of price differentiation, a commonly accepted classification dating to the 1920s is: Personalized pricing (or first-degree price differentiation) — selling to each customer at a different price; this is also called one-to-one marketing. The optimal incarnation of this is called perfect price discrimination and maximizes the price that each customer is willing to pay, although it is extremely difficult to achieve in practice because a means of determining the precise willingness to pay of each customer has not yet been developed. Group pricing (or third-degree price differentiation) — dividing the market in segments and charging the same price for everyone in each segment This is essentially a heuristic approximation that simplifies the problem in face of the difficulties with personalized pricing. A typical example is student discounts. Product versioning or simply versioning (or second-degree price differentiation) — offering a product line by creating slightly different products for the purpose of price differentiation, i.e. a vertical product line. Another name given to versioning is menu pricing.↑ ↑ 2.0 2.1 2.2 2.3 ↑ 3.0 3.1 3.2 3.3 ↑ ↑ ↑ ↑ 7.0 7.1 7.2 7.3 7.4 7.5 ↑ 8.0 8.1 8.2 ↑ 9.0 9.1 ↑ ↑ 11.0 11.1 ↑ ↑
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