Module 2 Lectures

Question 1

heterogeneous

Answer 1

when consumers are not alike in ways that are meaningful to marketing managers

-observe heterogeneity at a point in time for help with strategies

Question 2

targeting

Answer 2

a seller wants to address specific needs of “one type” of customers by offering a “unique” product

Question 3

what are questions to ask?

Answer 3

is differentiation possible?
if so, why?
if not, why not?
-makes us smart to know and help with creative solutions

Question 4

undifferentiation duopoly

Answer 4

two sellers with no differentiation in product

Question 5

duopoly

Answer 5

two sellers

price = demand *margin

must balance demand and margin (balance opposing forces)

Question 6

if quantity is too little

Answer 6

price goes up – higher profit margin, less sales

Question 7

if quantity is too much

Answer 7

price goes down – lower profit margin, more sales

Question 8

bertrand equilibrium

Answer 8

both firms set price = c and make 0 economic profits. this is a paradox bc in real life, people set prices above c.

Question 9

curnet equilibrium seems to say

Answer 9

competition is based on quantity not price

Question 10

hotelling model

Answer 10

–competing in a straight line

Question 11

profit =

Answer 11

margin * market share

Question 12

horizontal differentiation allows you to make prices

Answer 12

higher even with more disutility

Question 13

vertical differentiation

Answer 13

means consumers agree on product ranking based on attributes