Modeling Channel Margins Microeconomics revisited 06/06/06.

Slides:

Advertisements

Similar presentations

Question: What is worse for consumers than a Monopolist? Two monopolists. Vertical Markets: An analysis.

Advertisements

Total Cost, Total Revenue, and Profit Change as You Sell More Shoes.

Vertical Relations and Restraints Many transactions take place between two firms, rather than between a firm and consumers Key differences in these types.

Foundations of Chapter M A R K E T I N G Copyright © 2003 by Nelson, a division of Thomson Canada Limited. Understanding Pricing 13.

Chapter foundations of Chapter M A R K E T I N G Understanding Pricing 13.

At what Q is TR maximized? How do you know this is a maximum

Cost, revenue, profit Marginals for linear functions Break Even points Supply and Demand Equilibrium Applications with Linear Functions.

Microeconomics Allocating Scarce Resources Across Unlimited Wants Decision made by people individually and in groups.

Competition and Market Structures Class 4 Some Basic Microeconomic Tools. Ref: Some Basic Microeconomic Tools. Chapter 2. Industrial Organization – Contemporary.

What is the highest tuition at which you would have still chosen UCSB? Tuition and fees at UCSB is about $7600 for residents and $25000 for nonresidents.

Chapter 9: Inventories: Additional Valuation Issues

Please make your selection... 1.Choice One 2.Choice Two 3.Choice Three.

Review of Microeconomics: Demand, Supply and Prices 1. Write answers to the following without looking them up or asking anyone else. 2. Correct or add.

The Use of Price Elasticity of Demand Why Elasticity matters?

Introduction to Monopoly. The Monopolist’s Demand Curve and Marginal Revenue Recall: Optimal output rule: a profit-maximizing firm produces the quantity.

John R. Swinton, Ph.D. Center for Economic Education Georgia College & State University.

Factor Markets Land, Labor, Physical Capital & Human Capital

Microeconomics: Law of Supply & Demand

For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Chapter 18: Price Setting in the Business World.

The Firm in PC Labor Markets. Objective(s) 3. Students should be able to explain why a firm hires labor until MFC=MRPL and identify this point on a cost.

The University of Chicago

Session on adjusting for quality change 27 th Voorburg Group Meeting Warsaw, Poland André Loranger October 1, 2012.

2.3 RATES OF CHANGE Calc 10/1/14. Warm-up 2.3 Rates of Change - Marginals What were the rates in the warm-up problem?

SUPPLY AND DEMAND CHART Supply Curve: Slopes upward to the right Why? Producers will produce more if the price is high- it will increase revenue Called.

Pricing Math. Lesson Objectives Use the basic formula for calculating a retail price Calculate dollar and percentage markup based on cost Calculate discounted.

For use only with Perreault and McCarthy texts. © The McGraw-Hill Companies, Inc., 2000 Irwin/McGraw-Hill Chapter 17: Price Setting in the Business World.

Chapter 17 Price Setting in the Business World

MICROECONOMICS. Microeconomics The study of behavior and decision making by small units: –Individuals –Companies/Corporations/Firms.

Differentiation, Curve Sketching, and Cost Functions.

Section 1.4 Intersection of Straight Lines. Intersection Point of Two Lines Given the two lines m 1,m 2, b 1, and b 2 are constants Find a point (x, y)

Sales-Variance Analysis

DEMAND, SUPPLY, and MARKET EQUILIBRIUM Appendix (chapter 3)

1 MARKETING CHANNELS Pricing Strategy Berman Chapter 9 Version 3.0.

Financial Algebra © 2011 Cengage Learning. All Rights Reserved. Slide SUPPLY AND DEMAND Understand the slopes of the supply and demand curves. Find.

1.2 Linear functions & Applications. Linear Function f defined by (for real numbers m and b) x=independent variable y=dependent variable.

SUPPLY AS ECON. SUPPLY Quantity supplied of any good is the amount that sellers are willing to sell in the market Determinants of supply: – Price – Input.

Question: What is worse for consumers than a Monopolist? Two monopolists. Vertical Markets: An analysis.

Chapter Four: Elasticity. The Price Elasticity of Demand.

© 2012 Cengage Learning. All Rights Reserved. Principles of Business, 8e C H A P T E R 10 SLIDE Marketing Basics Develop Effective.

CONTEMPORARY ECONOMICS© Thomson South-Western 11.4Aggregate Demand and Aggregate Supply  Explain what is meant by aggregate output and the economy’s price.

Revenue. Lesson Objectives To understand what revenue is To understand the concepts of average, marginal and total revenue To be able to calculate AR,

Estimating Inventory Cost Retail Method of Inventory CostingRetail Method of Inventory Costing –based on the ratio of the cost of merchandise available.

Demand: It is the quantity of a good or service that customers are willing and able to purchase during a specified period under a given set of economic.

What three factors determine the demand for a product?

Calculating Marginal Utility. Marginal Utility Is the extra satisfaction generated from consuming one more unit of a good Is the extra satisfaction generated.

1994 Microeconomics Question 3.

All-Unit Quantity Discount Example

Economics Chapter 4 Review.

Increase in total revenue Decrease in total revenue

BUSINESS HIGH SCHOOL-ECONOMICS

My Own Meals Case Determine the markup for each distribution channel:

Marginal Revenue & Monopoly

Pricing Ken Homa.

Economics Chapter 4 Review.

Chapter Seventeen: Markets Without Power.

Chapter 18: The Market for Inputs

CHAPTER Perfect Competition 8.

A what level of production does the business start to make a profit?

Supply & Demand # 5 What is Supply?.

Pricing: Supply & Demand Curve, Pricing Strategy/ Pricing Objectives Overview Mrs. Wonder

EQUATION 3.1 – 3.2 Price elasticity of demand(eP)

Chapter 9: Inventories: Additional Valuation Issues

Chain Rule Chain Rule.

DEMAND & SUPPLY ONQ 10 QUESTIONS DID THE Jo’s GET THEIR NOTES???

Homework # 1 Week 1 Due Thursday 7 Oct.

Demand: a list of prices and the quantities that would be purchased at those prices, holding all other things constant.

Homework # 1 Week 1 Due Thursday 7 Oct.

Presentation transcript:

Modeling Channel Margins Microeconomics revisited 06/06/06

Required Project Discussion (3) What, do you estimate, are the gross margins for your specific retailers or retail categories? What governs setting resale prices for the principal retailer in your project, what are the approaches to pricing by its suppliers?

Retail demand

Retail demand and constant markup

Derived demand curve Combination of wholesale prices and quantities sold under different assumptions of retailer pricing Demand curve facing the retailer’s supplier(s). Permits modeling of “channel” margins, margins of retailer and supplier combined.

Retailer with constant unit markup

Retailer and vendor with constant unit markup

Retail demand and marginal revenue

Intersection of marginal revenue and marginal costs

Retailer and vendor marginal revenue +vendor marginal costs

Retailer and vendor marginal revenue +vendor marginal costs

Retailer and vendor marginal revenue +vendor marginal costs

Retailer able to obtain a guaranteed 50% markup, vendor with unique product

Retailer able to obtain a guaranteed 50% markup, vendor with unit markup