Submitted by: Submitted by ggcarolina
Views: 79
Words: 742
Pages: 3
Category: Other Topics
Date Submitted: 08/14/2014 03:58 AM
Market Structure
Johanna Smith
ECO/561
August 11, 2014
Dr. Rhonda White
Market Structure
For the Learning Team Reflection, “Team A” discussed the objectives reference market structure covered in Week 3. These objectives included the pricing strategy to meet organizational goals, non price barriers to entry based market structure, differentiation, and reducing costs for organizations. The Teams’ discussion included the topics they feel comfortable with, topics they struggled with, and how cost concepts relate applied to their current or past field experience.
Price discrimination Monopoly
A price discrimination monopoly is a company that increases its profits by selling different items and charging different prices to different customer groups for the same goods or services. To enable the price discrimination, consumers must be able to notice the difference in prices. The team came up with an example to explain this concept. First, price discrimination prices are derived from what consumers are willing to pay. If, person A is willing to buy one apple for W10,000 and person B is willing to buy one for W5,000, there is a W5,000 price difference. If person A knew that person B bought the apple for W5,000, person A would not want to buy an apple for more than W5,000. Even though the first price discrimination used in this example is very small, it is still important for consumers to know the difference. Enterprises and producers (suppliers) can understand the consumption pattern of the consumer behavior and this is why price discrimination occurs primarily in items such as luxury car price, where different country offer different terminal prices.
Second, price discrimination can occur when selling a bundle of goods rather than one. For example, there is to buy an apple in the market. The price of apples are 1 – W1,000, 5 – W4,500, and 10 – W8,000. When buying one apple, the price is W1,000 per apple. When you buy five apples, the price is...