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Q: What factors contribute to the advantage and disadvantage of various pricing strategies?
A: The factors that determine the advantage and disadvantage of Pricing Policies are:
Q: Illustrate and discuss the theory and application of “Peak Load” pricing strategy.
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A: The Stackelberg model was introduced by HV Stackelberg, which is an addition to the Cournot model.…
Q: Discuss at least 1 pricing practice that is illegal or unethical
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Q: Explain the advantages and drawbacks of using incrementalcost pricing rather than full-cost pricing.
A: Incremental Cost Pricing: The incremental cost pricing method attempts to use the directly…
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A: Hi! Thank you for the question, as per the honour code, we are allowed to answer three sub-parts at…
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A: The optimal price strategy that defines the above scenario is Peak load pricing.
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Q: what is an example of parallel pricing ?
A: Parallel pricing is a method of copying other companies' pricing strategies, especially…
Q: What are the equations of the Arbitrage Pricing Theory model
A:
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Q: Question #6: Consider a Cournot duopoly, the firms face an (inverse) demand function: Pb = 432 - 7…
A: b
Q: Discriminating monopoly is possible if two markets have
A: To find: Discriminating monopoly is possible if two markets have
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A: We are going to provide stepwise solution for all the subparts in this question.
Q: If a firm can observe a buyer's characteristics then it can charge different prices as a function of…
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Q: Suppose there are two types of cable TV viewers. The first type places a high value on sports…
A: The cable company's profit increases with increase in number of channels bought by consumers.
Q: 3.- (From problem 5.3 in the textbook) A nightclub manager realizes that demand for drinks is more…
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Q: please provide me some advantages and disadvantages of short term pricing policies
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Q: Suppose all individuals are identical, and their monthly demand for internet access from a certain…
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Q: There are two ice-cream parols on a beach. The dayly demand for ice-creams is given by Q = 3252 -…
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A: * ANSWER :- From the given information the answer is provided as below.
Q: Suppose Bang Bang is the only local swimming pool. She believes that there are 10 potential…
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Q: What is the critique and any idea to improve the Arbitrage Pricing Theory model
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A: Sunk costs are the costs that cannot be recovered.
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- Explain the advantages and drawbacks of using incrementalcost pricing rather than full-cost pricing.According to International Data Corporation (IDC), the number of worldwide smartphone owners will soon exceed 1.5 billion. That number is expected to grow at nearly 10 percent per year for the next five years. While the actual cost of a smartphone is about $300, wireless carriers in some countries offer their customers a “free” smartphone with a two-year wireless service agreement. Is this pricing strategy rational? ExplainYou are a medical group manager. Some market research has suggested that the price elasticity of demand for the services of your physicians is −4.1. The marginal cost for the average unit of physician service in your group is approximately $536. A. Using the economic pricing model formula, calculate your profit-maximizing price for each unit of physician services. B. Suppose that your medical group is considering new contracts with two particular businesses to provide physician services to their employees. If the marginal cost for each service unit is the same as with the rest of your customers, but the price elasticity of demand from the first new business customers is −0.9, and the second group of business customers is −4.4, how would that change your profit-maximizing price for each of the new groups? Would you recommend that your medical group obtain contracts with both new groups, just one of them or none? Explain your reasoning. C. In order to maximize your profits, what specific…
- A manager of a nightclub realizes that demand for drinks is more elastic among students and is trying to determine the optimal pricing schedule. Specifically, he estimates the following average demand for his customer types: Under 25: qr =18-5p Over 25: q=10-2p The two age groups visit the nightclub in equal numbers on average. Assume that drinks cost the club $2 to make. If the manager can charge a separate entry fee and a price per drink for each group, what two-part price will the manager set for reach group. Now suppose that once again it is impossible to identify which group the customers belong. Suppose the manager lowers the price of drinks to equal to marginal cost and still wanted to attract both customers, what entry fee would the manager set? Compare the profits earned in parts a) to d). Which scheme would you choose if you could not identify customer type and which would you choose if you could identify customer type.Smyth Industries operated as a monopolist for the past several years, earning annual profits amounting to $50 million, which it could have maintained if Jones Incorporated did not enter the market. The result of this increased competition is lower prices and lower profits; Smyth Industries now earns $10 million annually. The managers of Smyth Industries are trying to devise a plan to drive Jones Incorporated out of the market so Smyth can regain its monopoly position (and profit). One of Smyth's managers suggests pricing its product 50 percent below marginal cost for exactly one year. The estimated impact of such a move is a loss of $1 billion. Ignoring antitrust concerns, compute the present value of Smyth Industries' profits if it could have remained a monopoly when the interest rate was 5 percent. Multiple Choice $210 million $200 million $1.05 billion $100 millionThe information in the table below shows the total demand for premium-channel digital cable TV subscriptions in a small urban market. Assume that each digital cable TV operator pays a fixed cost of $200,000 (per year) to provide premium digital channels in the market area and that the marginal cost of providing the premium channel service to a household is zero. 1. Assume there are two profit-maximizing digital cable TV companies operating in this market. Further assume that they are not able to collude on the price and quantity of premium digital channel subscriptions to sell, how many premium digital channel cable TV subscriptions will be sold altogether and what price will be charged when this market reaches a Nash equilibrium? 2. Under the conditions given in Question #3 of this problem, how much profit will each firm earn when this market reaches a Nash equilibrium? 3. What is the socially efficient level of digital premium channel subscriptions for this market and at what…
- Suppose all individuals are identical, and their monthly demand for Internet access from a certain leading provider can be represented as p = 80 - 4q where p is price in $ per hour and q is hours per month. The firm faces a constant marginal cost of $20. If the firm will use a two-part pricing system and charge a monthly access fee plus a per hour rate, the monthly access fee will equal Suppose all individuals are identical, and their monthly demand for Internet access from a certain leading provider can be represented as p = 80 - 4q where p is price in $ per hour and q is hours per month. The firm faces a constant marginal cost of $20. If the firm will use a two-part pricing system and charge a monthly access fee plus a per hour rate, the monthly access fee will equal $450. $50. $80. $15.When the owner of the hand made Japanese ceramic kitchenware store instructs his sales staff to highlight the store's products are one of a kind, a_______________ skimming pricing strategy would be expected. prestige pricing strategy would be expected. follow-the-leader pricing strategy would be expected. dynamicYou have three tickets to a Celtics game on a night that you are going to be out of town (so the value of unsold tickets is zero to you). There are only four possible buyers of a Celtics ticket. The table below lists the respective reservation prices of these four possible buyers: Customer Reservation Price 1 $25 2 $35 3 $50 4 $60 You consider inviting bids using an English auction to sell your tickets. How much total revenue can you generate using the English auction mechanism from the sale of the three tickets? [Bids can be made in increments of $1.00]
