8. Market Structure and Pricing Strategy
8.1
Market structure taxonomyMarket structure depends on the uniqueness of the products, barrier to entry, and scale economy. Specifically, the more unique the product, the higher the entry barrier, and the larger the scale economy is, the greater the pricing power.
8.2
Pricing and economic surplusPricing affects how economic surplus is distributed between consumers and producers and thus the incentive and resources to come up with innovative products.
8.3
How Much Is Anything Worth?Price must cover cost for business survival but its level above cost varies with the product life cycle.
8.4
Flexible PricingThe Internet has made it possible to replace fixed pricing with flexible pricing based on changing supply and demand conditions. Spot pricing will lead to a more efficient market with winners and losers.
8.5
Captive CustomersPrison inmates must pay much higher fees for using pay phones installed by exclusive phone carriers chosen by the state.
8.6
Capping the SkyDeath-postponing cancer drugs command high prices because of the third-party payment health insurance system.
8.7
Noodle Price-hike ConspiracyPrice hike is difficult to sustain in commodity business with many competitors.