For years Samsung has had a proper market equilibrium with its smartphone's prices. 

However, the introduction of the Samsung Galaxy S10 plus allowed Samsung to produce a more

expensive version of their original Galaxy S10 that gave the consumer a bigger size smartphone

and larger memory bank. Samsung is maintaining the equilibrium by keeping the Galaxy S20

Ultra the same initial price of the Galaxy S10 Plus. Consumers understand that with more

prominent and innovative technology, comes a higher price tag. Samsung does cater to the

consumers that choose not to spend a lot of money on a smartphone by offering smaller versions

of their flagships with smaller memory banks, which comes with lower price tags.

Supply, Demand, and Equilibrium

It seems that Samsung will utilize the price Elasticity of Demand to be able to make up

for the lack of supply production while maintaining its profit margin. The Galaxy S20 Ultra (512

GB memory) will cost a whopping $1,599. Samsung is considered an Oligopoly. An Oligopoly is

a market where few producers dominate the market and have limited competition.

Samsung falls under what is Perfect Competition because, besides Samsung, other top

competitors could supply the consumer with great products if Samsung ceased to exist. Since

consumers have a plethora of different types of smartphones they can purchase at any given time,

there is no reason for consumers to be loyal to Samsung. This forces Samsung to create the best

product possible to keep their consumers happy and spending.

The negative externality stems from South Korea having 19 confirmed Coronavirus

cases, including one confirmed case discovered in one of Samsung's factories. This can cause the

virus to make its way to other countries including the United States if Samsung does not

aggressively inspect each product that leaves its factory.

Samsung is identified as an oligopoly, which is a market structure characterized by a few dominant producers who exert significant influence in the market, with limited competition. The pricing strategy of the Galaxy S20 Ultra, set at a substantial $1,599 for the 512 GB memory variant, suggests that Samsung may be leveraging the concept of price elasticity of demand. In an oligopolistic market, firms often pay close attention to how consumers respond to price changes. The higher price tag for the Galaxy S20 Ultra may allow Samsung to maintain its profit margins despite potential reductions in production supply.

To maintain its competitive advantage, Samsung has a low-cost structure and high responsiveness to economic events. Samsung's products cannot be considered as commodities, and the demand for them tends to change depending on the fluctuations of the price. Therefore, the utilization of non-price strategies is essential for Samsung to maintain its market share while emphasizing the importance of innovation and R&D. Nonetheless, Samsung has to apply the pricing strategy based on the analysis of the elasticity demand, as it determines the company's grounds for success in the future.

The text categorizes Samsung as participating in perfect competition, a market structure in which numerous firms offer products that are essentially identical to consumers. This classification implies that, apart from Samsung, other top competitors in the industry can provide consumers with comparable products. In such a competitive landscape, consumer brand loyalty is hard to secure. Consequently, Samsung must continually innovate and produce high-quality products to retain its customer base. 

The text discusses a negative externality related to the coronavirus outbreak. Specifically, it mentions that South Korea reported 19 confirmed coronavirus cases, including one detected in a Samsung factory. This situation could potentially lead to the virus spreading to other countries if not managed effectively. This emphasizes the importance of rigorous product inspections and stringent safety measures for products leaving Samsung's facilities to mitigate any global repercussions. 

The rise in people owning smart phones is continuously rising. There has been a decline in

smartphone purchases over the past year. Still, the new 5G network that will eventually replace

the existing 4G network will force the majority of the 3.5 billion consumers to purchase new

smartphones. Samsung is the leader of the smartphone industry, and with its latest flagship is

trying to maintain its position in the world. However, since Samsung falls into the Perfect

Competition bracket, there is no telling how the other companies that part of the Oligopoly are

will respond with the creation of their new flagships this year.

Supply, Demand, and Equilibrium

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Answer Here are the key points regarding the description provided 1 Samsungs Pricing Strategy Samsung has maintained a proper market equilibrium with ... View the full answer