6. Hongxing has developed a popular self-hypnosis course. She sells the course two ways: through a well advertised company website for a price of $150 and at an e- Bay storefront for $100. Her cost of producing and selling the courses depends only on the total number of courses she sells. Using one or more diagrams, explain Hongxing's pricing strategy. Be sure to cover (a) how Hongxing will decide the price and quantity to sell through each store, (b) what conditions must be met for Hongxing's pricing strategy to work, and (c) whether it is reasonable to assume these conditions are met in this example.
6. Hongxing has developed a popular self-hypnosis course. She sells the course two ways: through a well advertised company website for a price of $150 and at an e- Bay storefront for $100. Her cost of producing and selling the courses depends only on the total number of courses she sells. Using one or more diagrams, explain Hongxing's pricing strategy. Be sure to cover (a) how Hongxing will decide the price and quantity to sell through each store, (b) what conditions must be met for Hongxing's pricing strategy to work, and (c) whether it is reasonable to assume these conditions are met in this example.
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter10: Monopolistic Competition And Oligopoly
Section: Chapter Questions
Problem 16CTQ: Would you rather have efficiency or variety? That is, one opportunity cost of the variety of...
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