MGTA02H3 Chapter Notes - Chapter 4: Fixed Cost, Variable Cost, Oligopoly
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MGTA02H3 Full Course Notes
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Mgta02 chapter 4 pricing strategies & break-even analysis. Two things determine the business" ability to set its price: 1: the degree of competition, 2: the business" costs. Marketers should recognise that consumers aren"t necessarily rational. Pricing in a perfectly competitive market: characterized by a large number of small sellers, offering more-or-less the same product, buyers enjoy a good deal of choice. Buyer has the right to walk away from any seller and check elsewhere: individuals must charge what everyone else does. Market price: at any particular time, the prevailing price to which buyers and sellers agree. Pricing in an oligopoly market: small number of competitors that watch each other closely. If one raises/lowers prices they all do: compete of the bases of differentiation, oligopoly businesses want consumers to associate their product with colours, designs, and logos that become symbols for the product"s reliability. Pricing in a monopolistically competitive market: most of the many sellers are small.
