1. Modeling Channel Margins Microeconomics revisited 06/06/06

2. 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?

3. Retail demand

4. Retail demand and constant markup

5. 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.

6. Retailer with constant unit markup

7. Retailer and vendor with constant unit markup

8. Retail demand and marginal revenue

9. Intersection of marginal revenue and marginal costs

11. Retailer and vendor marginal revenue +vendor marginal costs

12. Retailer and vendor marginal revenue +vendor marginal costs

13. Retailer and vendor marginal revenue +vendor marginal costs

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

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

16. 2.00 1.00 150