Increasing Price Discrimination In The Workplace

Using the simulation as a guide the price elasticity of demand is reviewed to determine the effects of pricing strategies. Demand can either decrease or increase based on price of a product or service (Colander, 2010). Consumers tend to buy products were there is a decrease in price (Colander, 2010).

14. When the price increases from $4 to $6 and the quantity demanded decreases by 2 units, the price elasticity of demand is

Critical assessment of Superior Supermarket’s current pricing practices, recent consumer research, competitor behavior, and a SWOT analysis can give credence to a more effective pricing strategy and help assess whether a ‘Everyday Low Prices’ strategy is justifiable.

Elasticity of demand is a measure of responsiveness to a price change of a good or service. When demand is elastic, the percentage of a price change of a product will result in a larger percentage of quantity demanded (McConnell, p 77). It basically means reducing the price of a good service will result in a greater quantity demanded and an increase in revenue for the seller. When demand is inelastic, a change in price will result in a reduction of quantity demanded, which will then lead to a revenue decrease (McConnell, p 77). To demonstrate elastic and inelastic demand results, Company A sells 100 pens at $1.00 a piece each day, making their revenue $100.00. Company A

Those consumers that have flexibility to choose when they demand a product will benefit from price discrimination. An example of this would be workers that have the ability to take a holiday at short notice might be able to benefit from a heavily discounted price. This is second-degree price discrimination and it can be shown below on the diagram.

The economic logic of RPM is to redirect retailers’ competitive activities from prices to customer service. Factors such as price, quality, design and customer service on the part of retailers affect the demand for differentiated consumer goods. Therefore, by assuring resellers that they will not face discount price competition from other resellers of the same brand, minimum RPM agreements encourage retailers to invest in services or promotional efforts to sell that brand against competing brands. So although RPM may diminish intra-brand price competition among retailers selling the same brand, Grimes argues that it compensates for this by enhancing inter-brand competition between retailers as a result of the increase in intra-brand service competition . Affirming this theory, the Supreme Court recognized in Continental TV that, “when inter-brand competition exists…..., it provides a significant check on the exploitation of inter-brand market power because of the ability of consumers to substitute a different brand of the same product” . Mathewson and Winter suggest that increased consumer demand due to enhanced retail services , elicited through a protected retail margin, will more than offset a negative impact on demand of a higher retail price. Thus, RPM allows manufacturer to influence the supply of retail service by controlling its retailers’ margins, thereby using retail service as an instrument of inter-brand competition. This

Prices for a good or service is determined by supply and demand. For tickets to sporting events, there are a set number of tickets which means the quantity is limited and set long before the season starts. The supply curve is perfectly inelastic at the stadium’s capacity. This means that the marginal cost is close to zero until the stadium’s capacity is reached. Depending on where this quantity lies relative to the demand curve determines whether the team will decide to sell out or have empty seats. If the team maximizes profits by not selling out, then the team will decide to have empty

II. When price falls from 4 pounds to 3 pounds the demand for travel increases to 80,000 units- At the original market price of 4 pounds the demand for travel was 60,000 units generating revenue of 240,000 pounds. When the price is reduced to 3 pounds the resulting demand is 80,000 units and this also generates income of 240,000 pounds. When market price changes and the resulting revenue remains the same it can be said that price elasticity of demand is unitary in

The article ‘Coles, Woolworths, Aldi price war gets personal with cut-orice tissues and toothpaste’ discuss how they through the price war to win more consumers, so as to occupy a large market share. To start with, Coles and Woolworths both cut the price of their top selling items, such as rice, tissues and toothpaste, as well as the grocery brands, Kleenex, Sunrice and Colgate (Catie, 2016). For these top selling items, the most common logic which is customers are welling to see it in a conspicuous (Sharp, 2013, p.290). People will buy these items not just one time or buy it in another supermarket. It is easily to see then cut down the price, this action will prevent the customers from going to their competitors.

WASHINGTON D.C. President Barack Obama has yelled on Congress to raise the joined minimum wage, the centerpiece proposition at the State of the Coalition address that pondered on business inequality in America. Pointing out that the present minimum of $7.25 is nearly 20% lower in real paying manipulation than it was 25 years ago, he impelled legislators to prop a bill that ought to grasp the nationwide rate to $10.10. We additionally have to do supplementary to safeguard our economy distinctions the dignity of work and that hard work pays off for all of our citizens. Americans overwhelmingly concur that no one who works maximum era must to ever have to raise a relation in poverty.

His demand is sensitive to price changes, so his demand would decrease as price increases. His demand is elastic for many reasons. It could be because he sees the tickets as a luxury rather than a necessity. The tickets do not help his life in any manner other than offering it entertainment.

For example, in the article it states that, “ In summertime, when the living is easy and children need entertaining, demand is high, and relatively insensitive to price” (S.K., 2016) This can be further proven with Disney display of their demand-based pricing. Demand-based pricing also known as customer-based pricing, is any pricing method that uses consumer demand - based on perceived value - as the central element. (https://www.boundless.com/marketing/textbooks/boundless-marketing-textbook/pricing-8/general-pricing-strategies-62/demand-based-pricing-310-4130/). As a result, the demands can be reflected upon the pricing. Referring to figure one, when the calendar dates are highlighted in bronze, that indicate that demands are below-average which unveiled the cheaper pricing that Disney theme parks offer at $105 per day. However, when the dates on the calendar are highlighted in silver that represent the average crowd days which the pricing is at $115 per day. And during Disney parks crowded day are when the demands are above average, the price increase to $125 per

Because the paint is at 2.56, this is considered to be elastic demand. This means that the demand for the good changes at a faster rate than the price change of the good. Sales fall off steeply when the price increases, but they jump sharply when the price declines.

Understanding the fundamental concepts of economics allows us to analyze laws that have a direct bearing on the economy. These laws and theories are essentially the backbone of how economics is used and studied. The law of demand can be expressed by stating that as long as all other factors remain constant, as prices rise, the quantity of demand for that product falls. Conversely, as the price falls, the quantity of demand for that product rises (Colander, 2006, p 91). Price is the tool used that controls how much consumers want based on how much they demand. At any given price a certain quantity of a product is demanded by consumers. As the price decreases, the quantity of the products demanded will increase. This indicates that more individuals demand the good or service as the price is lowered. This can be illustrated using the demand curve. The demand curve is a downward sloping line that illustrates the inversely related relationship of price and quantity demanded.

Price discrimination can be defined as when the same good or service is sold at different prices to different consumers. If we look at this definition of price discrimination, for an example, we can show that price discrimination can be seen in the entrance tickets of parks such as Universal studios; this is due to the fact that there are discounts for children and senior citizens. (Phlips L. , 1983) However, this can be seen as not being discriminative at all due to the fact that if the price difference full reflects the difference in the cost of carrying the good from the seller’s location to the buyers’ location.