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Novosadov [1.4K]
3 years ago
8

One example of price discrimination occurs in the publishing industry when a publisher initially releases an expensive hardcover

edition of a popular novel and later releases a cheaper paperback edition. Use this example to demonstrate the benefits and potential pitfalls of a price discrimination pricing strategy.
Business
1 answer:
Anastaziya [24]3 years ago
3 0

Explanation:

Price discrimination is a strategy used by companies, which is characterized by the price variation of the same product so that there is an increase in profits, that is, companies sell their products at the highest price the consumer is willing to pay.

There are <u>three degrees</u> of price differentiation:

  1. first degree: perfect discrimination - This practice occurs when the producer raises the price of the product to the maximum that the consumer is willing to pay, which generates increased revenue and profitability.
  2. Second degree: discrimination by quantity - The price per unit varies based on the quantity purchased. Take 3 and pay 2 promotions is an example of this practice.
  3. Third grade: discrimination by type of consumer - In this practice the producer differentiates the type of price according to the consumer's profile. Techniques are used to find out which consumer is willing to pay more and which is willing to pay less. <u> It is the example of the question described in the statement.</u>

There are added benefits to the price discrimination strategy, for the company is an opportunity to maximize profits when it can maximize the price of the product, for the consumer is an opportunity to buy a product at a lower price.

Disadvantages of this strategy include the monopoly power exercised by companies in setting higher prices for certain consumers than for others.

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bixtya [17]

Answer:

b. All of the answers are correct.

Explanation:

Death Spiral is a situation when a company's goods or services produced are declining and fixed cost is same. The company will be exposed to a burden of fixed cost if its output is reduced.  

In this question the various departments of a company are underutilized. The fixed price allocated to each department will be same hence creating a burden on a company's funds. Managers may decide to reduce the services they use to reduce the cost of their department. The internal pricing system will start recovering the sunk cost of company. Managers will also consider purchasing services internally or externally whichever is cost effective. All of the statements are correct there b is correct option.

7 0
3 years ago
Pursuing its own best interests, Firm A will concede that cigarette smoke causes lung cancer _____. Group of answer choices None
marshall27 [118]

Answer:

None of the following answer choices is correct.

Explanation:

In pursuing its own best interest Firm A will in no case concede that cigarette smoking causes lung cancer. Cigarette smoking is injurious to health and mostly firm print this warning on the cigarette labels but since it is an addiction people do not care to read this.

6 0
2 years ago
The first unit of a job took 40 hours to complete. The work has a learning percentage of 88. The manager wants time estimates fo
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Answer:

im confused on that one

Explanation:

4 0
2 years ago
The Wet Dog Surf Company borrows $27,000 at 5.00% for 10 months. Calculate the total interest amount (rounded to the nearest pen
earnstyle [38]

Answer:

total interest = $1125

Explanation:

given data

principal = $27,000

rate = 5 %

time = 10 months

to find out

total interest

solution

we get here total interest that is express as

total interest = principal × rate × time   ....................1

put here value and we get

total interest = $27,000 × 5 % × \frac{10}{12}    

total interest = $1125

7 0
3 years ago
During the year ended December 31, 2017, State Street Corporation had the following results: Sales revenue $267,000: cost of goo
mel-nik [20]

Answer:

34.6%

Explanation:

The formula to compute the company's profit margin is shown below:

Profit margin = (Net income) ÷ (sales revenue) × 100

                     = ($92,400) ÷ ($267,000) × 100

                     = 34.60%

It shows a relationship between the net sales or sales revenue and the net income which is earned by the company. All other items which are mentioned in the question are irrelevant. So, these are not considered in the computation part. Hence, ignored it

5 0
3 years ago
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