Assume You Have Been Hired to Advise Two Different Firms,A

question 14

Essay

Assume you have been hired to advise two different firms,A and B,regarding the price each firm should charge for its product,focusing on the amount each firm should mark up price over marginal cost.While both firms are price setters,the product produced by firm A is extremely unique and enjoys widespread appeal.In contrast,firm B sells a fairly standard product for which there are are several good,but not perfect,substitutes.How would your advice to each firm differ? How does the price elasticity of demand influence your recommendations?

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Definitions:

Performance Management

The systematic process by which an organization involves its employees in improving organizational effectiveness in the accomplishment of the organization's mission and goals.

Organization's Goals

The objectives or aims that a company or an organization attempts to achieve, which guide its operations and strategic planning.

Employees' Activities

Refers to the actions or tasks employees engage in as part of their job roles within an organization.

Training

The process of enhancing skills, knowledge, and competencies, enabling individuals to perform effectively in their roles.