Ask Experts Questions for FREE Help !
Ask
    cmulabah's Avatar
    cmulabah Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Feb 23, 2008, 06:07 PM
    Price-setting firm
    Explain why a price-setting firm will always set its revenue-maximizing price below the price that would maximize its profit.
    thegandyman's Avatar
    thegandyman Posts: 26, Reputation: 6
    New Member
    		  
    #2

    Feb 23, 2008, 06:19 PM
    Many factors go into maximizing profit.
    It makes more sense to make a hundred pennies than it does to make a clean dollar.
    More people happy with knowing they got a good deal is better than one person knowing they got ripped off.
    "Price setting firms" by whatever name obviously deal with much more subtle margins than that but they work on the same principle. If there is a finite number of people that can make purchases, then the margins are higher, if there is a finite number of purchases a person can make, the margins are also higher. If one person can make multiple purchases, you will find much narrower gross margins.
Not your question? Ask your question View similar questions
 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Objective of Firm [ 1 Answers ]

:confused: What is the traditional objective of Firm? Please explain with an example.

Firm breasts? [ 2 Answers ]

I was just wondering if it's true that moisturizing your breasts daily/nightly keeps them nice 'n perky? What if you're already kind of sagging, would it still be effective? Any personal experiences on this?:rolleyes:

Depression glass: setting a price [ 2 Answers ]

A friend has asked me to help his mom sell her Depression Glass collection. We have a book that identifies and gives values for them. We've tried auctioning a few pieces but no luck. They want to set the minimum price as the one listed in the books. I think they should try for lower and hope...

View more questions Search