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What are the three ways that societies can organize themselves economically

Principles of Economics | 1st Edition | ISBN: 9781938168239 | Authors: Steven A. Greenlaw, Timothy Taylor ISBN: 9781938168239 470

Solution for problem 18 Chapter 1

Principles of Economics | 1st Edition

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Principles of Economics | 1st Edition | ISBN: 9781938168239 | Authors: Steven A. Greenlaw, Timothy Taylor

Principles of Economics | 1st Edition

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Problem 18

What are the three ways that societies can organize themselves economically?

Step-by-Step Solution:
Step 1 of 3

Pricing Policy Dimensions Price Flexibility ­ One Price Policy: same for everyone everywhere ­ Vulnerable to competition ­ Flexible Price Policy: different customers, different places, different prices ­ Too much cutting can hurt profit ­ Dynamic Pricing ­ Prices change with supply/demand F.O.B. Shipping Point ­ Customer arranges and pays for transportation ­ Customer takes ownership of goods as soon as they leave seller ­ Cleanest/simple method for seller ­ Most B2B is done this way F.O.B. Destination ­ Seller arranges and pays for transportation and charges back to customer ­ Customer takes ownership of goods at delivery ­ Also called “freight­absorption” and/or “delivering price” ­ Zone pricing: service divided into zones with average transportation costs per zone ­ Seller pays actual transportation cost,charges customer average cost within zone ­ Uniform Delivered Pricing ­ Same price for all shipments, average of all costs Discounts and Allowances Consumer discounting: quantity, seasonal, trade, sale, cash, coupons Channel allowances: advertising allowances, stocking fees, push money, trade­ins Price ←→ Offering Pricing objectives: Sales oriented: $ or unit growth, market share growth Status quo oriented: meeting competition, non­price competition Profit oriented: price to generate most profit over lifetime of product Most products ­ lower price, more sales But how much more will you sell ­ pr

Step 2 of 3

Chapter 1, Problem 18 is Solved
Step 3 of 3

Textbook: Principles of Economics
Edition: 1
Author: Steven A. Greenlaw, Timothy Taylor
ISBN: 9781938168239

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What are the three ways that societies can organize themselves economically