Focus Group 4 Price Games Q1 According to the article big re

Focus Group 4: Price Games Q1. According to the article, big retailers such as Amazon and Wall Mart play strategic pricing games to capture a larger share of sales. From what we studied in class, what type of market structure do they face and why?

Solution

Amazon and Walmart are very large firms which try to capture the product market and thus create a monolpoly of their products in the market. Thus, they usually take support of differential pricing under which the same commodity is provided at different prices in various locations, according to the purchasing power of the buyers of that particular location.