Wednesday, September 17, 2014

Online Music and Profit Maximization

The Economist back in 2009 argued that online music sellers should not set uniform prices in selling online music.  The article linked above does an excellent job of explaining how online music sellers can increase profits by charging different customers different prices due to difference in those buyers willingness to pay.  In class I will use this example to show how firms can increase their profits by following a variable pricing strategy.

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