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What are the pricing and non-pricing strategies monopolies use to maximize their profits?

Marketing Jan 09, 2021

What are the pricing and non-pricing strategies monopolies use to maximize their profits?

Expert Solution

In monopoly a seller enjoys the power of setting and determining the price for his supplied good. The seller of a monopoly sets a price where his marginal revenue (MR) becomes equal to his Marginal cost (MC). This is the pricing strategy of monopoly.

In the non-pricing strategies- there are mainly discrimination of prices among different consumer. The seller charges different type of price for different consumer.

For example-In cinema halls or public bus, they often charge different type of prices to different type of customer such as-to students, disable people, seniors citizen they charge less on the other hand they charge more even though the cost of supplying that the service provided by them to each of their consumer or customer is identical.

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