Market power and pricing strategies
6 important questions on Market power and pricing strategies
Requirements to persue pricing strategy
2. Firm must prevent customers from resale and arbitrage (reselling product at price higher than original)
Strategies for customers with different demand
2. Can firm identify its customers' differing demands only after they make a purchase?
Direct price discrimination
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Indirect price discrimination
When indirect price discrimination
2. Firm's customers have different demand curves
3. Firm can't directly identify which type of demand before purchase
Ways to execute indirect price discrimination
2. Incentive compatibility
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