Critical reflection on the usefulness of theoretical models for business decision making. The aim is to study microeconomic models of pricing policies and their application by writing a report based on a specific sector / market: Airline Market in Europe. 10 pages, APA format, graphical analysis and interpretation needed to illustrate conclusions.
Microeconomics chapters to apply in the analysis (After leaving behind perfect competition and basic monopoly models already in previous reports):
New Hypothesis: Price Discrimination (under imperfect competition/monopoly);
Constant marginal costs assumption for easier graphical analysis;
Monopoly market equilibrium compared to optimal prices with demand segmentation, conditions and difficulties to practice several prices;
Practical effects of differentiated prices on the produced quantities, profit variation, consumer surplus and well-being;
Examples of price discrimination, operational difficulties;
More complex price structures: Non-linear prices
Scale economies as a reason for quantity discounts;
Quantity discounts with homogeneous clients-Graphical Interpretation-conclusions, examples;
Blocs pricing Graphical interpretation-conclusions, examples;
2 parts prices-definition, connection with business profits, homogeneous clients assumption, graphical interpretation, conclusions;
companies’ caution in extracting consumer surplus and graphic example of price changes, model with Heterogeneous clients, graphical interpretation, conclusions;
Quantity discounts and Package sales graphic interpretation, conclusions and operational difficulties
New Hypothesis: The price of a product has effects over the consumption of another product (joint prices model);
Oligopoly model Production;
Complementary Products, definition, graphic interpretation conclusions. Comparison with substitute products
Substitute Products definition, conclusions, examples
Products basket definition, graphic interpretation in terms of consumer surplus and business efficiency;
From the above mentioned theoretical chapters, use only the ones that apply to the analysis of the sector Airline Market in Europe.
Will send scientific articles attached for a start, other recent references more than welcome
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