It May Appear That All Unprofitable Customers Should Be Dropped

question 34

Essay

It may appear that all unprofitable customers should be dropped.However,before any action is taken,managers should evaluate all the implications of the action for the affected customer,for other customers,and for the company.
Required:
a.Explain three implications for the affected customer.
b.Explain three implications for other customers.
c.Explain three implications for the company.

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Definitions:

Pure Monopolist

A market status where a single seller dominates the market with no close substitutes for the product or service offered.

Discriminating Monopolist

A monopolist that charges different prices to different groups of consumers for the same product or service, maximizing profit by exploiting the differences in willingness to pay.

Monopolistic Competitor

A firm in a market structure where many companies sell products that are similar but not identical.

Monopsony Labor Market

is a market structure where a single buyer (employer) substantially controls the market as the major purchaser of labor, influencing wages and employment conditions.