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Consumers will substitute with a rival's product.
Consumers will substitute with a rival's product.
Consumers will substitute a rival's product.
A strong government BEST protects a firm from being forced to sell its product at an unfairly low price.
A monopolist has market power, this means that they can set the market price of a good through restricting output. A monopolist can charge different prices to different customers through price discrimination. Assumptions are made that they monopolists objective is to maximise profits. A monopolists profit maximising strategy is to charge different prices to different consumers varying on the price elasticity between them. This will extract the maximum consumer surplus, and thus maximise profits. To price discrimiate there must also be some degree of barriers to prevent consumers for switching suppliers. A common strategy of price discrimination is giving students a discount, this is because students are normally more sensitive to prices due to their low income. Students may only buy a product if a discount is given, so the firm provides a discount in order to make these sales.
Consumers will substitute with a rival's product.
Consumers will substitute with a rival's product.
Consumers will substitute with a rival's product.
Businesses may charge their own prices and may also form monolpolies. Without government regulation, a single firm could control one product and charge the consumer higher than what it is worth to maximize its own profit. (especially if the product is considered essential for living)
Consumers will substitute a rival's product.
Businesses may charge their own prices and may also form monolpolies. Without government regulation, a single firm could control one product and charge the consumer higher than what it is worth to maximize its own profit. (especially if the product is considered essential for living)
A strong government BEST protects a firm from being forced to sell its product at an unfairly low price.
a firm whose product has an elasticity of 0.31
A monopolist has market power, this means that they can set the market price of a good through restricting output. A monopolist can charge different prices to different customers through price discrimination. Assumptions are made that they monopolists objective is to maximise profits. A monopolists profit maximising strategy is to charge different prices to different consumers varying on the price elasticity between them. This will extract the maximum consumer surplus, and thus maximise profits. To price discrimiate there must also be some degree of barriers to prevent consumers for switching suppliers. A common strategy of price discrimination is giving students a discount, this is because students are normally more sensitive to prices due to their low income. Students may only buy a product if a discount is given, so the firm provides a discount in order to make these sales.
Creaming the market is when a firm or business may charge a very high price for a certain product. The firm will continue to charge a very high price until rival products appear.
Consumers will substitute with a rival's product.
A firm might use a personal survey approach to help them set prices for customers of different geographical areas. They might also use a market research study. The really aggressive firm is going to call potential customers themselves and ask what they would pay for certain items.