ajaz_eco_204_2012_2013_chapter_16_Market_Power

The ring rang up fast profits a lesson in how the net

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Unformatted text preview: (ever so slightly) prices on its products, computes the current price elasticity and adjusts prices accordingly. Here are two articles: 86 ECO 204 Chapter 16: Analysis of Firms with Market Power (this version 2012-2013) University of Toronto, Department of Economics (STG). ECO 204, S. Ajaz Hussain. Do not distribute. March 1, 2002 Price Flexing: How the Web Adds New Twists By Amy Cortese Last summer, after running a print ad for a women's midriff T -shirt, Nordstrom got an unexpected heads-up from its online customers. Women shoppers were flocking to the store's Web site to check out what marketing executives at first thought was the T-shirt itself. But when they looked closer, they realized the shoppers were actually asking for the jeweled navel ring the model was wearing in the ad. Not for sale at the time but clearly in demand, Nordstrom execs scrambled to make the ring available online. Then, using its online data about customers to test various prices with a variety of different buy er groups, they priced it to move. The ring rang up fast profits: a lesson in how the Net can make you smarter about both products...
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