Question: Based on the case study above, critically explain THREE ( 3 ) examples of degree price discrimination. In each case, explain why the monopolist choose
Based on the case study above, critically explain THREE examples of degree price discrimination. In each case, explain why the monopolist choose to follow this business strategies aimed at charging different prices to different customers.CASE STUDY: WHAT WENT RIGHT AT INTERLINK SURGICAL STEEL AND GILLETTE?
In the s and early s Interlink sold replacement hypodermic syringes by the thousands to hospitals for cents per syringe. Each time a catheter was changed, a new hypodermic syringe would be inserted into the patients vein. A Japanese surgical steel company entered the market with an identical product for cents each. Interlink promptly introduced a replacement device that only needs insertion one time; that is any new saline or pharmaceutical drip lines can be hooked directly to an interlink syringe device that need not be removed and replaced. This new process reduces the risk of patient infection and the inherent hazard to the nursing staff of exposure to patient blood. Interlink again dominates the market, and prices have stabilized at higher levels than before.
Similarly, Gillette Co responded to a fourbladed new product introduction of Quattro by Schick Wilkinson Sword. Quattro had stolen percent of Gillettes percent market share in the mens razor market. Instead of an ongoing parade of discounts, coupons, and promotions, Gillette rolled out its own innovation: a batterypowered vibrating razor called MachPower. MPower improves the closeness and longevity of the shave by exciting chin hairs to push up out of their follicles. The new product costs twothirds more than the Gillette MachTurbo it replaced, and replacement cartridges are per cent higherpriced
Source : Based on How to Fight a Price War Harvard Business Review MarchApril ; How to Escape a Price War Fortune June and Gillette to Lunch Wall Street JournalJanuary
With an appropriate diagram, critically discuss why is the telecommunication companies firms is kinked demand curve in the market?. Identify the FIVE factors affecting the likelihood of successful collusion in this market structure.
Step by Step Solution
There are 3 Steps involved in it
1 Expert Approved Answer
Step: 1 Unlock
Question Has Been Solved by an Expert!
Get step-by-step solutions from verified subject matter experts
Step: 2 Unlock
Step: 3 Unlock
