According to the CollinsDictionary.com, “monopolistic means exclusive control of the market supply of a product or service”. (Collins, 2013) A monopolistic has total control of profitable action through the ownership or legitimate funding. Monopolistic competition is about non-price competition (marketing, trademarks, designer titles) whereas the company’s product is different from its competitor’s product or substitute but functions in a similar fashion in whatever industry it may be facilitated for its consumers and lead toward rise in monopoly power but not proceeds. Monopolistic competition is about having no barriers or limitations to entering a market which has control of setting the pricing of the market, where there are
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The theater can continue to produce and sale the unit or theater tickets or unit of tickets as long as marginal revenue is greater than or equal to its marginal cost, which are determined by demand and supply, market structure and the objectives of the firms managers. Theaters have pricing strategies for its particular consumers such as military, senior citizens and students. Theaters offer discounts to individuals who can show a student, military, or AARP identification card because it lures those customers to utilize the theater often at the lesser price producing an expense those consumers can afford. In other words according to McEachern (2012) “monopolist has a tendency to charge a lower price if it relies on the fact its demand is more elastic than other demanders. A zero marginal cost of production would maximize profits by electing to produce a quantity where demand of the unit is elastic”. (McEachern, 2012) A business, such as a theater, practices price discrimination must remain capable of setting prices, separate markets to inhibit resale from the inexpensive to expensive market, and pinpoint distinct demand elasticity’s in relevant markets.
Pricing strategy is an activity intended towards the outcome of a good, product or service, or most favorable value that is comprised of its general selling objectives which are: consumer demand, product quality characteristics, competitor pricing, marketplace and trade, and industry