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Determining Price Levels and Pricing Policy
This paper discussed and evaluated the internal and competitive affects of a price reduction strategy within monopolistic competition market structure. It presented evidence from marketing, general management, and accounting which attest to product X elastic demand. Further, it explored the relationships between demand, marginal cost, marginal revenue, and average total cost and their combined affect on profitability.
In conclusion, product management concurs with marketing's proposal to reduce prices. However, product management also suggests that accounting conduct and report additional marginal cost and marginal revenue analysis in order to properly identify profit maximization.
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- Determining Price Levels and Pricing Policy
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