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Necessary condition for price discrimination

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Discuss the necessary conditions to make price discrimination work and the best practices to use price discrimination to maximize profits while avoiding price wars. In your discussion make evident the challenges of the strategy even in markets where it is possible.

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Price discrimination is charging different prices to different customers at different times in different markets and these price differences are not due to cost differences.

The necessary conditions for price discrimination are:
1. The firm must have ...

Solution Summary

For price discrimination to work, three condition must be met. They are; firms must have control over prices, the price elasticity of demand must be different over the range of prices and markets or customers must be separable.

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Current Market Conditions / Discussion Questions for project

I am working on a project that will consist of about 110-125 words per question. I need to analyzing the current market conditions of "Starbucks" (selected Business)Please address the following topics in your analysis: (all information is about Starbucks only)
1. Prices
2. Technology
3 Price elasticity of demand
With one reference per question

1. Competition can take many forms. Price competition includes collusion, price discrimination, price leadership, loss leaders, and game theory (thinking about what the other "players" will do in response to your "move"). Non-price competition includes product differentiation and advertising.

a). List a few products that are marketed using price and non-price competition.

b). Identify an advantage of each strategy and under what conditions you might use each.

2. How do market prices differ between perfectly and imperfectly competitive markets?

a). How do the cost structures and ability of a firm to differentiate its product from a competitor's product help to determine market structure?

b). Provide a real world example of each of the following market structures:

· Perfect competition
· Monopoly
· Monopolistic competition
· Oligopoly

Thank you for your help.

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