Monopoly Pricing Strategies and Price Discrimination
Monopoly Regulation Challenges
Regulating monopolies is often challenging in the real world. The main problem is that regulators do not have all the information necessary to determine the exact price point where the demand curve intersects the average total cost curve. Sometimes they set it too low, causing supply shortfalls; sometimes they set it too high. Moreover, regulated monopolies tend to overstate their costs to regulators and to provide consumers with inferior products.
In short, sometimes
Read MoreCost Accounting System: Features, Types, and Process
**Cost Accounting System Process**
1. Features
- They are used in companies manufacturing in series, similar or homogeneous products, where the final product is the result of several successive processes.
- It is a cost accumulation method that can calculate averages for each period (daily, weekly, monthly, or yearly) for each element of cost.
- The application of this methodology is piped through cost centers, which shall monitor the consumption of the components of costs absorbed by each process or department,
Key Economic Concepts: Scarcity, Markets, and Systems
Key Economic Concepts
Scarcity: There is not enough of an item to satisfy everyone who wants it.
Steps to the Scientific Method
Observe a problem; make assumptions; develop a model, theory, hypothesis, or law; make predictions; test model & predictions.
Common Fallacies
- Fallacy of Composition: Wrongly concluding that what’s right for one person is right for everyone.
- Fallacy of Association/Causation: Wrongly concluding that what’s happening is based off something else.
- Fallacy of Division: Wrongly
Understanding Money Supply, Central Banks, and Inflation
Money Supply
The money supply is the set of means of payment that circulate in the economy at a given moment.
- A) To increase the money supply, the Fed can:
- Mint and issue more bills
- Reduce the reserve ratios of banks
- Increase loans to banks
- Make purchases on the open market
- B) To reduce the amount of money, the Fed can:
- Withdraw notes and coins from circulation
- Reduce loans to banks
- Perform sales transactions in the open market
Monetary policy is the use of these instruments to increase or decrease the money
Read MoreProduct Classification, Development, Branding, and Pricing Strategies
Product Classification at United Nations
The International Standard Industrial Classification of All Economic Activities (ISIC) is the international reference classification of productive activities. Its main purpose is to provide a set of activity categories that can be used for the collection and reporting of statistics according to such activities.
The Central Product Classification (CPC) constitutes a complete product classification covering all goods and services. It serves as an international
Read MoreKey Concepts in Business Pricing and Distribution
Key Business Concepts
- Variable Costs: Those that vary with the volume of production.
- Fixed Costs: Those that remain constant.
- Total Cost: The sum of variable and fixed costs.
- Unit Cost: Variable costs plus fixed costs divided by expected sales units.
- Break-Even Point: Where income equals cost, with no profit or loss.
Pricing Strategies
- Method to Fix a Quote Price: An expected value model.
- Pricing Promotion: Conveys a message about the product, sometimes instead of advertising.
- FOB Origin Price: When the