ADMS 2200 Chapter Notes - Chapter 13: Monopolistic Competition, Profit Maximization, Value-Based Pricing

• School: York University
• Department: Administrative Studies
• Course: ADMS 2200
• Professor: Kim Snow

Document Summary

Competition act: the most comprehensive legislation in canada, designed to help both consumers and businesses by promoting a healthy competitive environment. Price discrimination: some customers pay more that others for same product. Price fixing: form of collusion where sellers get together to fix prices higher than those in a free. Bid rigging: colluding to set prices with respect to one or more requests for competitive proposals. Predatory pricing: company sets price lower than cost for an extended period of time to eliminate (eg. bidding on a contract) market competition. Profit maximization (point at which increase in revenues from an increase in price = cost) Target return (reaching specified sales or return on investment) Market share (goal of controlling specified minimum market share) Value pricing (matching competitor"s price but creating more value) Customary prices: traditional prices that customers expect to pay for certain goods and services. Marketers determine prices by theoretical supply and demand analysis and by completing cost- oriented analysis.