Price Discrimination Strategies
Added on 2019-10-01
4 Pages352 Words153 Views
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Michael is first degree price discriminating.Charging more during River Fire is an example of Peak load pricing.ThePeak Load Pricingis thepricingstrategy wherein the highpriceis charged for the goods and services during times when theirdemandis atpeak. This is what exactly happened here.The other three options are not correct. It is NOT a second-degree price discrimination that reflects quantity discounts. First option is incorrect.There is no information regarding cost. So third option is incorrect Helen definitely has the pricing power. So last option is also incorrect.
When compared to Woolworth and Coles, Cotsco could be argued to be engaging in second degree price discrimination.This is correct because second degree price discrimination only deals with quantity discounts for larger quantities. If Coles and woolsworth both decide to choose a strategy that results in significant losses for both of them they are likely facing a Prisoner’s Dilemma For statement 2 above, if Coles and Woolsworth follow the strategy resulting in significant losses for both of them, it would have resulted in them both playing their dominantstrategy. a.Prisoner’s Dilemmab.Yes
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