You will need at least 150 words to answer each of the following questions. For Unit 8, you will want to treat the assignment almost like an open-book final exam. All of the concepts that are covered in the assignment are detailed in the text and Attend. I would also suggest spending some time with the Technical Problems that are similar to the questions on the Complete. Make sure all material are read and information is cited with scholarly sources.
- Explain whether or not your employer (or any other firm of your choosing) uses uniform pricing. Using your example, explain why uniform pricing may not be optimal.
- Why is first-degree price discrimination seldom possible? Use the example of a car dealership to defend your answer. You will also want to employ the three conditions necessary for price discrimination in your answer.
- Wholesale clubs like Sam’s or Costco are prime examples of two-part pricing. Explain why this is the case. Then, explain how these clubs should set their usage fee and access charge in order to maximize profit.
- Microsoft uses third-degree price discrimination to maximize profit when it charges different groups of customers different prices through its household, student, and business versions of software. Assume the versions are identical, only the users are different. Which version should have the highest price? Which version should have the lowest price? Why?
- Compare and contrast the output and pricing decisions a firm that produces two products that are complements in consumption with the output and pricing decisions of a single product firm.
- Suppose you are employed to set prices for a local car dealership. The dealership currently uses cost-plus pricing. Will you leave this pricing technique in place? Why or why not?