Here are a situation where the customer is important, in the "bargaining power with buyers". -They could opt for another product paying little or no switching cost. Can you explain this point to me in a simple way?
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Here are a situation where the customer is important, in the "bargaining power with buyers".
-They could opt for another product paying little or no switching cost.
Can you explain this point to me in a simple way?
Step by step
Solved in 2 steps
- Explain Briefly with zero plagiarism In the selling process or in negotiations, who typically has the upper hand, the buyer or the seller?Mention an example of each point. Number of buyers vs. suppliers: If the number of buyers is small compared to the number of suppliers, the buyer's power is greater. Dependence of a buyer's purchase on a single supplier: If a buyer can obtain similar products/services from multiple suppliers, the buyer's reliance on a single supplier is reduced. As a result, the buyer's power would be greater. Costs of switching: Switching is costly if there are few alternatives. As a result, the buying power of consumers would be limited. Backward Integration: If a buyer can integrate or merge suppliers, he or she will have more negotiating power with existing suppliers.JetBlue and Delta are the only two major airlines with regularly scheduled service between New York and Nantucket. There are 900 potential passengers every week, each of whom is willing to pay up to $400 for a ticket. Since the two airlines provide an essentially identical (bad) service, customers simply prefer to buy from the cheaper one. (If they charge the same price, then they will split the market equally.) Each airline can transport at most 1200 passengers each week. You can safely assume that each airline spends literal peanuts (i.e., zero) serving passengers; however, each passenger displaces air cargo that is worth $160 in profits to the carriers. Suppose that each airline takes a short-run perspective and only wants to maximize each week's profits, and that neither one would consider shutting down the route in the foreseeable future. (a) What is the appropriate economic model to study price competition in this market? (b) If you use Nash equilibrium to make a prediction, what…
- JetBlue and Delta are the only two major airlines with regularly scheduled service between New York and Nantucket. There are 900 potential passengers every week, each of whom is willing to pay up to $400 for a ticket. Since the two airlines provide an essentially identical (bad) service, customers simply prefer to buy from the cheaper one. (If they charge the same price, then they will split the market equally.) Each airline can transport at most 1200 passengers each week. You can safely assume that each airline spends literal peanuts (i.e., zero) serving passengers; however, each passenger displaces air cargo that is worth $160 in profits to the carriers. Suppose that each airline takes a short-run perspective and only wants to maximize each week's profits, and that neither one would consider shutting down the route in the foreseeable future. (a) What is the appropriate economic model to study price competition in this market? (b) If you use Nash equilibrium to make a prediction, what…JetBlue and Delta are the only two major airlines with regularly scheduled service between New York and Nantucket. There are 900 potential passengers every week, each of whom is willing to pay up to $400 for a ticket. Since the two airlines provide an essentially identical (bad) service, customers simply prefer to buy from the cheaper one. (If they charge the same price, then they will split the market equally.) Each airline can transport at most 1200 passengers each week. You can safely assume that each airline spends literal peanuts (i.e., zero) serving passengers; however, each passenger displaces air cargo that is worth $160 in profits to the carriers. Suppose that each airline takes a short-run perspective and only wants to maximize each week’s profits, and that neither one would consider shutting down the route in the foreseeable future. a) What is the appropriate economic model to study price competition in this market, and why? b) If you use Nash equilibrium to make a…How do you find willingness to pay? and if there are 100 customers like this? what would be the total profit. ? How would you use 2 part tariff pricing on this?
- Youngstown-Warren Regional Airport (YNG) has had a difficult time securing passenger service from a commercial airline. a.) A few years ago, the Port Authority offered an incentive to United with guaranteed revenue equal to approximately $1.5 million, but United declined saying it was not sufficient. Suppose United anticipated that it would cost $1 million to offer flights from Youngstown, so with a guaranteed revenue of $1.5 million, their anticipated profit would equal $500,000. Given that they still chose to decline offering service from YNG, what do you know must be true? Put this in terms of implicit costs and economic profit. b.) In 2019, YNG’s only commercial carrier, Allegiant Air stopped offering service from YNG, despite the fact that it was known to be profitable. Allegiant Air’s service from YNG was known to be profitable. Why would Allegiant Air pull service from YNG even if it had been their service from YNG had been generating a profit? Note, Allegiant started…Consider a market transaction that you have recently undertaken for considering) as a consumer which was notable because it is particularly recent. large, or unusual. Analyse this transaction from a micro-economic standpoint a. Explain how & why (from the supplier perspective, the good or service of your choice was created, and the reason you entered the market to secure this product or service (on demand side). b. Discuss in general terms the factors on the demand and supply sides that will have influenced the price you paid for this product. Show what might happen to the price of the product if one of these factors changes in the equilibrium framework c. Assess whether the product of your choice is likely to be price elastic or inelastic at the current market price (from demand perspective). Following this assessment describe the likely impact on the supplying company's revenue following an increase in the price they charge (ceteris paribus)You read about a traveling situation in which some airline passengers seem toget a “fast pass” through security and move effortlessly through the boarding process, while other passengers are waiting in long lines. In this example, the travellers who are moving quickly through the boarding process are probably: a) VIP passengers waiting longer more in an inconvenient lines b) Passengers who value time and convenience and are willing to pay additional fees for the privileges and other services c) Loyal passengers whom they knew beforehand in which line to go to avoid delays and inconveniences d) Government officials who are seated in the executive area
- Bargaining power may exist for a seller if they have another buyer to whom they can sell the product.True or False?Target produces a good with significant network externalities. The willingness to pay equation is p = 1 – q + 2.5q2 . Show on the graph the firm’s demand curve at each price from 0 < P < 3. What three equilibrium values of q may result if Firm A sets a price of $1.5? Indicate them on your graph. [the quadratic equation helps you solve for one of them.] Are the equilibria you identify stable? Does stability matter to Acme?Suppose you run a marketing survey and find you have two types of customers high-value customers willing to pay 16 and low-va consumers willing to pay just 10. Your survey tells you that there are equal numbers of high- and low- value customers. Obviously , have two possible options price high (16) and sell only to the high value group, or price low (10) and sell to everyoneThe costs incurred is 5 per unit and sales only happen to high -value consumers 50 % of the timeWhich price should you choose ? Select the correct response price high price low it depends price both high and low
