Lt Reflection

Topics: Monopoly, Brand, Hamburger Pages: 4 (1051 words) Published: July 26, 2011
Learning Team Reflection Week Three
ECO/561

Learning Team Reflection Week Three
Learning Team B discussed and summarized the objectives for week three. The objectives are as follows: determine pricing strategy to meet organizational goals, determine ways to create nonprice barriers to entry based on market structure, determine ways to increase product differentiation based on market structure and determine ways to reduce costs for an organization. Determine pricing strategy to meet organizational goals

The four market models are pure competition, pure monopoly, monopolistic competition, and oligopoly (McConnell, Brue, & Flynn, 2009). Depending on the type of market and the organizational goals the pricing strategy can vary. Members of Team B discussed the example in the book of deteriorating motels. Because of a change in roads and traffic flow a motel may no longer be in an area to attract the traveling public. Closing the motel appears to be what the owner should do. However, the owner’s pricing strategy becomes one of charging enough to cover fixed costs and still make a small profit off the motel. It becomes more profitable in the short run to stay in business and neglect the maintenance costs than to shut the business down. Of course the room rates will have to continue to go down as the condition of the motel continues to deteriorate however the motel is still profitable. So in this case the motel’s goal is to stay in business as long as possible with the least amount of fixed costs. This is just one example of pricing strategy to meet organizational goals (McConnell, Brue, & Flynn, 2009). Determine ways to create nonprice barriers to entry based on market structure

A pure monopoly has the following situations: single seller, no close substitutes, price maker, blocked entry, and nonprice competition (McConnell, Brue, & Flynn, 2009). The term “barriers to entry” or blocked entry means there are conditions that stop...

References: Agarwal, A. N., Harmon, E.R., & Viertler, M.J. (2009). Cutting sales cost, not revenue. McKinsey Quarterly, 2009(2), 76-85.
McConnell, C. R., Brue, S. L., & Flynn, S. M. (2009). Economics: Principles, problems, and policies (18th ed.) New York: McGraw Hill/Irwin
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