A. Set forth the basic markup pricing technique. B. What role does price elasticity play in...

A. Set forth the basic markup pricing technique.

B. What role does price elasticity play in markup pricing? Respond in terms of a more elastic demand, and then a more inelastic demand.

C. Generally speaking, why is price discrimination typically a good thing for both businesses and consumers?

Expert Solution

(a)

where is elasticity of demand.

(b) if the elasticity of demand is very high then markup will be low and if elasticity of demand is low then markup will be high.

(c) for business price descrimination help generate more profit then standard monopoly case. This intern leads to more investement as more profitable firms invest more.

price discrimination is not always bad for consumer as once all high willingness to pay types consumers are done then firms reduces prices to serve low willingness to pay type consumer. This makes all types to avail the benefit of the product. This is possible because of price discrimination. Price discriination also helps in avoiding congestion. As initially firms charge higher prices which leads to less congestion and then slowly firm reduces prices which brings some kind of regulation in the market.

Rahul Sunny answered 1 year ago

short answer A. Set forth the basic markup pricing technique. B. What role does price elasticity...

short answer A. Set forth the basic markup pricing technique. B. What role does price elasticity play in markup pricing? Respond in terms of a more elastic demand, and then a more inelastic demand. C. Generally speaking, why is price discrimination typically a good thing for both businesses and consumers?

What role does the price elasticity of demand play in markup pricing, i.e., how does it affect the firm's ability to mark up price over marginal cost?

What role does management play in the “basic bargain”?

What role does/or can security play as a risk management technique? Does it seem that this...

What role does/or can security play as a risk management technique? Does it seem that this practice is widely used? If so, why? If not, why not?

Discuss Pricing and Elasticity as it relates to Total Revenue. What decisions does price elasticity allow...

Discuss Pricing and Elasticity as it relates to Total Revenue. What decisions does price elasticity allow firms to make regarding the pricing of its products? When does the firm raise prices? Lower prices? Give examples of goods that are perfectly inelastic, explain why? Give examples of goods that are perfectly elastic, explain why? What is peculiar about unit elasticity?

What role does price play when negotiating and communicating value?

What role does demand play in the ability to price discriminate? Why?

What role does consumer surplus play in the profitability of price discrimination?

What role does consumer surplus play in the profitability of price discrimination? A. Price discrimination is only profitable when the economic profit of the firm(s) exceeds consumer surplus. B. Price discrimination is only profitable when there is additional consumer surplus that can be converted to profit. C. Price discrimination is profitable regardless of whether there exists any additional consumer surplus that can be converted to profit. D. Price discrimination is only profitable when there is no additional consumer surplus that can be converted to...

Does social media play a role in advertising? If so, what role does it play?

what role does consumption play in shaping your sense of self? what role does it play...

what role does consumption play in shaping your sense of self? what role does it play in our society?

Question