Essays on Price Discrimination

a. False, as in monopolistic competition there are no restrictions for entry, other firms can enter the market easily, and in the long-term period all firms are making 0 economic profit. b. False, as price discrimination involves market segmentation which allows to charge a higher price to the segment with low elasticity. With more firms in the industry, it is harder to negotiate the agreements, moreover, with low entry barriers you cannot keep the high price for too long as such profit attracts potential rivals.

In monopolistic competition firms are trying to differentiate their products and advertisement is the way to achieve the Marketing differentiation.

The firm would operate at point q2 as the market is in the long-run ...

The core values St. Leo’s represents is applicable to the debate surrounding the ACA. St. Leo represents and firmly believes in community and integrity. The ACA is reportedly designed to provide for the welfare of the community, meaning Americans at large. The issue surrounding the ACA is that many say the provisions lack integrity due to various different reasons. Regardless of these issues, integrity is often defined as doing the right thing, even when no one is watching. World leaders and policy makers have a responsibility to maintain integrity to benefit the communities in which they live, whether ...

Economic short answer

2.a. To maximize profits, it is necessary to produce the quantity when the marginal revenue is higher than the marginal cost. In Q=8 the marginal revenue is higher than the marginal cost, from Q=9 the marginal revenue is lower than the marginal cost. Then the answer is Q=8. 2.b. The data represents a not perfectly competitive firm because the graph is not horizontal, but a downward-sloping demand curve (Piana). 4. A downward-sloping demand curve says that the final price of an article at a crescent quantity will decrease reducing the marginal revenue of the last produced article. 5. The ...

Question 1.

As the production will increase, the supply curve will shift to the right, therefore the equilibrium price will decrease, (Figure 1): Figure 1. The increase in production on the mango market Thus, as the quantity of production has increased by 30 % from Q0 to Q1, the supply curve shifts from S0 to S1 and the equilibrium price decreases from P0 to P1.

Question 2.

In agriculture, the term bumper harvest means the unusually high production of a crop. Though some politicians might claim that this benefits the farmers, actually that is not exactly so. Firstly, with the increased production the ...

Price discrimination refers to a business practice which involves selling of similar or near similar products to consumers at different prices during a certain period (Stole and Lars 2221). There are two main motives why businesses engage in the practice. Firstly, the business may be aiming at becoming a monopoly in the said market segment. In this case, the business could sell certain highly priced goods at a low price to a certain market segment that the business wishes to control. The second and the main reason why businesses engage in price discrimination is to take advantage of consumer ...

1. When two or more sellers or producers struggle to achieve the same segment or establish the market, then competition rises in the market. Competition occurs when any producer or seller tries to sell similar product or service with the motive of achieving profit and capturing the market share. The competition comes together with innovation that brings the new displacing technologies in the market (Arnold, 2010). This is called the competition for the market. On the other side, competition in the market refers to the set of actions of the new entrants in the market that focuses on gaining ...

Price elasticity is one of the three necessary requirements for price discrimination to be possible. If difference in price elasticity does not exist for different customer segment, a firm cannot engage in price discrimination. Differing levels of price elasticity allows a company to offer different prices for the same product to different customers, knowing fully well that the demand for price inelastic customers would not decline much while the demand through price elastic customers would increase by a much higher margin. The first example illustrates the large increase in profits of an airline which has 50% each, price inelastic ...

Introduction

Sharp Park, which is named after George Sharp, has a long, rich history. Mr. Sharp owned a more than 400-acre estate that he established with a vision for the San Francisco residents to enjoy recreation in a natural setting. When he died together with his wife, the property was left to the San Francisco City Council under strict instructions that it would only be used for recreational purposes. Sharp Park is in California off Highway 1 along the Pacific Ocean, San Francisco. It has existed since 1917; the golf course was established in 1930s. In 1941-internment camp was established ...

Assignment 2

Strengths Neiman Marcus has a strong American luxury brand portfolio. Its strong customer loyalty adds up to its strengths. The company’s market sustainability is enhanced by its recession-resistant clients who have considerably high discretionary spending (Leslie, 2016). Besides, the organization has conspicuous, eye-catching multi-channel retail formats thereby attracting a large group of the upper middle class and the upper class. The organization’s departmental stores are located in upscale areas where the target customers including the celebrities and the wealthy class can access them.

Weaknesses

The store’s marketing and global exposure are relatively low compared with the standards ...

Introduction

The first antitrust law was formed by the Congress in the year 1890. It was referred to as Sherman Act, and its aim was to ensure that there was economic liberty, by ensuring that the competition in the trade was fair. Later, the Congress passed other two antitrust laws in the year 1914, and these additional laws contained some revision to the first antitrust law. Those laws were the Clayton Law and the Federal Trade Commission Act. The court applies the antitrust law to prevent illegal business practices and unlawful mergers. The main objective of the antitrust law is ...

Part A: Multiple Choice Questions:

The seller must have market power, that is the seller must have some control over price The seller must be able to identify different customer groups with different demand elasticities The seller must be able to prevent arbitrage between the two groups All of the above You’ve just decided to add a new line to your manufacturing plant. Compute the expected loss/profit from the line addition if you estimate the following:

There is a 70% chance that profits will increase by $100,000.

There is a 20% chance that profits will remain the same. There is a 10% chance that profits will decrease by $15,000. Loss of $15,000 ...

Harford’s book The Undercover Economist is devoted to the exploring of fundamental reasons for rich economies being rich and poor economies being poor. Formaini smartly notices that Harford in his book “seems to want to explain to noneconomists some of the interesting theoretical conclusions that economists use to explain observed behavior and wealth pattern” (204). Within the book, which is rather easy for understanding, a set of major concepts from economic theory are deeply analyzed and interestingly and, sometimes, entertainingly explained by the author. In terms of this paper, a brief summary of Harford’s book will be ...

Price competition is the core element of a free-market economy. Firms and organizations have been engaging each other in pricing behaviors like price fixing, price collusion, predatory pricing, deceptive price advertising, price confusion, resale price maintenance, and price discrimination amongst others (Grewal, and Compeau 3). These practices concerning pricing have a great impact on the public welfare. As a result, the government has taken the position of implementing legislation and judicial policies that aim at regulating the price behaviors in organizations. Other agencies that monitor pricing include the federal and local government. According to Grewal, and Compeau (3), the ...

Toyota Prius has redefined the automobile industry with its daring mass production of a car hybrid never witnessed before. It is 19 years of success for Toyota for its popular brand since its launch in 1997. Today, the company is fighting to maintain the market share following the launch of various competing car models. The competition in the car industry continues to stir war among the motor giants with other c-class cars entry in the highly polarized market. Every car manufacturer is fighting for a slice of the market share to be able to remain relevant and maintain brand ...

Organizations adopt various strategies to thrive in the ever competitive business world. The primary objective of firms is making profits; hence, measures should be taken to ensure the enterprises achieve that goal. One of the tactics that Apple Ltd has employed to ensure profitability in the firm is price discrimination in their products. In this article price discrimination will be discussed, and the products that will be considered are Apple Watch Sport, Apple stainless steel watch, and Apple Watch Edition, which are the smart watches the firm has introduced in the market. Price discrimination refers to a pricing policy ...

PART A- Questions related to ‘The Mystery of the Invisible Hand’

Jevons Marshall is a fictitious pen name used by the true author(s) of the book. Who really wrote the book? What makes ‘Jevons Marshall’ a clever choice for the pen name in this case? Answer. The pseudonym Jevons Marshall is used by two renowned professors of economics who are William Breit and Kenneth G. Elzinga. The pen name is derived from the surnames of two famous economists named Alfred Marshall and William Jevons. The pen name made from the names of these two economists is deliberately used for writing mystery novels based on economics as where the former ( ...

Positive price discrimination has always been a handy channel for distributors and retailers to maximise their profits. The basic principle behind positive price discrimination is information asymmetry between different consumer groups and also difference between demand patterns for different consumers (Shpanya, 2014). With the advent of online auction sites such as eBay, both these principles are getting eroded. More and more information about the products and prices is freely available on the internet for everyone to process. Further, the consumers have been able to adjust their demand patterns according to the product availability over time, with the same product ...