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Chapter 24: Q. cFCT (page 548)

What essential economic conditions must be satisfied for firms to succeed in utilizing big data techniques to engage in price discrimination that increases their profits?

Short Answer

Expert verified

Market segments must be kept separate by factors like time, distance.

Step by step solution

01

Introduction

Price discrimination is that the act of selling products at different prices to different customers tomaximize sales. Penetration pricing is useful for businesses since this promotes buyers to shop higher quantity of inventory their products or it can motivate otherwise uninterested consumer groupsto buy products or services.

02

Given Information

While price discrimination is that the act of charging different prices for the identical good, there are different price discrimination strategies which will benefit a enterprise.

03

Explanation

There had to be several market divisions, including individual consumers and enterprise buyers. Market segments must be kept separate by factors like time, distance, or how they use the merchandise. Alternative prices will attract market sections.

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Most popular questions from this chapter

A monopolist's revenues vary directly with price. Is it maximizing its economic profits? Why or why not? (Hint: Recall that the relationship between revenues and price depends on price elasticity of demand.)

The marginal revenue curve of a monopoly crosses its marginal cost curve at \(30per unit and an output of 2million units. The price that consumers are willing to pay for this output is \)40per unit. If it produces this output, the firm's average total cost is $43per unit. What is the profit-maximizing (loss-minimizing) output? What are the firm's economic profits (or economic losses)?

What is the effect of Overton's barrier to entry on the total quantity of cold drinks sold by the city's food-and-beverage retailing industry?

Look again at Figure 24-5. Suppose that Q2 is equal to 35 units of output per time period. If the vertical distance to point C is \(6 per unit and the vertical distance to point B is \)3 per unit, then by how much does producing the 35 th unit of output affect the firm's economic profits?

A monopolist's marginal cost curve has shifted upward. What is going to happen to the monopolist's price, output rate, and economic profits?
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