In addition to my job at Pizza Hut, I work at Madison Square Tanning. With prom season approaching, Ellen (who also works there) suggested that the company give discounts to high school students. Being economically savvy, the owners agreed that it was a good idea, and offered $5.00 coupons off any package for high school students.
This is a prime example of price discrimination. Since tanning for students is relatively elastic compared to adults (hopefully it is not an inelastic service for anybody), the company offered coupons to make it easier for the students. This is good business, too, because many of these students might not have come to our business/or continued service with us for a while because it is difficult for students to come up with $30 or more for a tanning package. We didn’t lose any money or customers, so everything from these coupons was a profit. Also, the students who are using these coupons who regularly tan there are experiencing a larger consumer surplus, because they will pay less than they were willing/had anticipated. However, this isn’t bad for the business, because the coupon is not that large, so the company is still operating with a bigger producer surplus.
Ok, so I got off topic here. Anyway, because of the elasticity of the service, there is price discrimination that works very well. It is the same as the airplane tickets. Business people travel during the week, and rarely on the weekends, so the tickets for week-only flights are more expensive because businessmen/businesswomen have a more inelastic need for the flights. In my scenario, businesspeople are to adults what family vacationers are to students. Anyway. If you are reading this and you’re by a window, and you look outside and think to yourself, “Wow it’s beautiful and warm and sunny out!” Do it. Get up and go outside and play Frisbee and have a picnic. If you’re at school, don’t even tell the teacher where you’re going. Just leave. (Just kidding, of course). And if you’re at home and you’re thinking to yourself, “Yeah right I have too much homework” take your homework outside with you….Enjoy the weather!
Tuesday, April 24, 2007
Thursday, April 19, 2007
Microsoft is like Kleenex
http://www.theregister.co.uk/2007/04/19/microsoft_windows_xp_starter/
http://caribjournal.com/2007/04/19/microsoft-unveils-3-windows-xp-office-2007-package/
Microsoft has launhed ap lan that will help a suspected 5 billion people in dveloping countries through their new outreach program, "the Partners in Learning program". They have created a new software package entitled Microsoft Student Innovation Suite, which will be VERY cheap for students. This package includes Windows XP Starter Edition, Microsoft Office Home and Student 2007, Microsoft Math 3.0 (what is this?) Learning Essentials 2.0 for Microsoft Office, and Windows Live Mail Desktop. This package must be puchased directly by 'qualifying governments' and supplied directly to students, which will begin in the second half of 2007. It is being sold for $3. The program, Partners in Learnign program is active in 101 countries currenlty, reahing more than 57 million students worldwide. I would like to know how they are supplying this directly to governments.
I think I am a little skeptial, it's only going to "qualifying governments", they are using old software (XP, not Vista) and seriously, $3? Sounds too good to be true, but who am I to judge....
So pretty much in these articles, we watch closely as Microsoft takes over the wrold for total domination. Microsoft, or rather packages similar to the ones offered by Microsoft (writing programs, presentation programs, database programs, etc. Which by the way, its hard to think of names for these programs besides the names we know and love brought to us by : Microsoft). Anyway, Microsoft and programs would be part of monopolistic competition because they have similar, yet different goods, and they are competing within the same market that is not THAT difficult to enter/exit. Microsoft, coming from a power hosue with lots of money, has enough profits each year to start selling packages for much cheaper so as to break into the poor students and indigent markets. This will open more doors up for Microsoft in the long run, regardless of the fact that they are selling cheaper products, they are now selling to consumers they did not have prior to the price reduction. I think that Microsoft is very smart to use this tactic, becasue they are lowering the prices so much they are making it difficult for other companies to compete, and they are seen as heroes because htey are doing good for more people in the world (YAY!). Anyway, since Microsoft is a big name, more people want this brand in the first name, because we don't think of it as word processing software, we think of it as Microsoft Word, becasue Microsoft is like Kleenex, the brand name has taken over hte product name.
http://caribjournal.com/2007/04/19/microsoft-unveils-3-windows-xp-office-2007-package/
Microsoft has launhed ap lan that will help a suspected 5 billion people in dveloping countries through their new outreach program, "the Partners in Learning program". They have created a new software package entitled Microsoft Student Innovation Suite, which will be VERY cheap for students. This package includes Windows XP Starter Edition, Microsoft Office Home and Student 2007, Microsoft Math 3.0 (what is this?) Learning Essentials 2.0 for Microsoft Office, and Windows Live Mail Desktop. This package must be puchased directly by 'qualifying governments' and supplied directly to students, which will begin in the second half of 2007. It is being sold for $3. The program, Partners in Learnign program is active in 101 countries currenlty, reahing more than 57 million students worldwide. I would like to know how they are supplying this directly to governments.
I think I am a little skeptial, it's only going to "qualifying governments", they are using old software (XP, not Vista) and seriously, $3? Sounds too good to be true, but who am I to judge....
So pretty much in these articles, we watch closely as Microsoft takes over the wrold for total domination. Microsoft, or rather packages similar to the ones offered by Microsoft (writing programs, presentation programs, database programs, etc. Which by the way, its hard to think of names for these programs besides the names we know and love brought to us by : Microsoft). Anyway, Microsoft and programs would be part of monopolistic competition because they have similar, yet different goods, and they are competing within the same market that is not THAT difficult to enter/exit. Microsoft, coming from a power hosue with lots of money, has enough profits each year to start selling packages for much cheaper so as to break into the poor students and indigent markets. This will open more doors up for Microsoft in the long run, regardless of the fact that they are selling cheaper products, they are now selling to consumers they did not have prior to the price reduction. I think that Microsoft is very smart to use this tactic, becasue they are lowering the prices so much they are making it difficult for other companies to compete, and they are seen as heroes because htey are doing good for more people in the world (YAY!). Anyway, since Microsoft is a big name, more people want this brand in the first name, because we don't think of it as word processing software, we think of it as Microsoft Word, becasue Microsoft is like Kleenex, the brand name has taken over hte product name.
Sunday, April 15, 2007
pepsi this time around
http://today.reuters.com/news/articlebusiness.aspx?type=consumerProducts&storyID=nN26366190&from=business
Ok... So I was trying to find the article concerning either Coca-Cola or PepsiCo buying out some shares of Starbucks, but I couldn't find it. Anyway, in my search for this I typed in "Pepsi buys" in the Google News Search Engine through Archives, and it was amazing to look at all the different other companies that they hav ebought out. Mountain Dew, Juice Companies, Alcohol companies, etc. So, coming back to more current events, I took a look at Pepsi Buying out the juice company IZZE.
IZZE has beverages like sparkling apple and sparkling grapefruit, and other fruity sparkling juices. Pepsi wanted to buy this company to have an alternative to their soft drinks, and an alternative to the sugary drinks they own (appealing to the masses, people tha tdon't like soda, diabetics/dieters, etc). The drinks are all cafeine free and the sugarsd are from fruit juice, not refined sugar. This article goe son to say tha tPepsi was looking to add it to the list of different options, like Tropicana, SoBe, energy drinks, Aquafina, and the joint ventures (at that time anyway, now I think they really did make this deal) with Starbucks and Lipton iced Teas. On the day of these discussions/deals, the PepsiCo shares rose 13 cents.
So we all know that Pepsi and Coke are part of an oligopoly for soft drinks. Well actually, it's pretty much those two taking this over. But essentially, they operate on the oligopoly/monopoly levels, using characteristics from both since they are both so big. They clearly like to buy up competitors, but they also buy up smaller companies, like IZZE so they can monopolize the drink market but so they can COMPETE with the other member of hte oligopoly. It's much more difficult to enter this market, becuase it is hard to compete with such monstrous coroporations, but in this case, I don't think it would be as difficult to leave the market because if Pepsi wanted to leave the market, Coke would probably jus tbuy them up. But that would create a monopoly, and I'm not so sure how the governmen would feel about that. Oh that darn Pepsi. THey also bough the Naked drinks in 2006, as well. But in comparison, when you look ups Coke buys, you turn up just as many results for drink companies that Coke bought. I find it interesting that there is an article about Pepsi buying Tropicana from Seagrams back in like, 1998, and that likewise, there is an article about Coca-Cola buying Seagrams mixers drinks....So they broke apart a drinking company and each took a piece.
Ok... So I was trying to find the article concerning either Coca-Cola or PepsiCo buying out some shares of Starbucks, but I couldn't find it. Anyway, in my search for this I typed in "Pepsi buys" in the Google News Search Engine through Archives, and it was amazing to look at all the different other companies that they hav ebought out. Mountain Dew, Juice Companies, Alcohol companies, etc. So, coming back to more current events, I took a look at Pepsi Buying out the juice company IZZE.
IZZE has beverages like sparkling apple and sparkling grapefruit, and other fruity sparkling juices. Pepsi wanted to buy this company to have an alternative to their soft drinks, and an alternative to the sugary drinks they own (appealing to the masses, people tha tdon't like soda, diabetics/dieters, etc). The drinks are all cafeine free and the sugarsd are from fruit juice, not refined sugar. This article goe son to say tha tPepsi was looking to add it to the list of different options, like Tropicana, SoBe, energy drinks, Aquafina, and the joint ventures (at that time anyway, now I think they really did make this deal) with Starbucks and Lipton iced Teas. On the day of these discussions/deals, the PepsiCo shares rose 13 cents.
So we all know that Pepsi and Coke are part of an oligopoly for soft drinks. Well actually, it's pretty much those two taking this over. But essentially, they operate on the oligopoly/monopoly levels, using characteristics from both since they are both so big. They clearly like to buy up competitors, but they also buy up smaller companies, like IZZE so they can monopolize the drink market but so they can COMPETE with the other member of hte oligopoly. It's much more difficult to enter this market, becuase it is hard to compete with such monstrous coroporations, but in this case, I don't think it would be as difficult to leave the market because if Pepsi wanted to leave the market, Coke would probably jus tbuy them up. But that would create a monopoly, and I'm not so sure how the governmen would feel about that. Oh that darn Pepsi. THey also bough the Naked drinks in 2006, as well. But in comparison, when you look ups Coke buys, you turn up just as many results for drink companies that Coke bought. I find it interesting that there is an article about Pepsi buying Tropicana from Seagrams back in like, 1998, and that likewise, there is an article about Coca-Cola buying Seagrams mixers drinks....So they broke apart a drinking company and each took a piece.
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