What is the relationship between price and demand? Why is it important for a firm to price at the point at which marginal revenue is equal to marginal cost?
Inverse relationship.
What should a firm consider fairness when pricing its goods?
Fairness is important because price determines at point if the product will be purchase, price is looked at as quality. There are a few things that are taken into consideration when it comes to pricing: the past price, close-substitute price, and context – what is the environment in which the purchase is being made.
How has the Internet enhanced opportunities for dynamic pricing strategies?
Some opportunities are decreased menu cost: cost is associated with the changing prices of a product; in the internet its easy to change the price of products with less cost to the company unlike offline stores. Interactivity: it is easier for sellers and buyers to interact — it cost them less.
Why would a firm want to implement a price-discrimination strategy?
What is the difference between static and dynamic markets? Why must a firm consider its pricing strategies within the context of a dynamic market?