Resources:
http://www.forbes.com/sites/timothylee/2012/06/06/comcasts-obnoxious-price-discrimnation-strategy/
http://www.forbes.com/sites/timothylee/2012/06/06/comcasts-pricing-shell-game/
Wednesday, November 28, 2012
Internet, Cable, and Cell Phone Service
I read two articles about price discrimination, one about a man and his struggle with the Comcast internet service and the other written by the same man after a representative from Comcast read his article and called him in response. While at the introduction of a internet service plan it seems there is no price discrimination and that everyone is offered the same deal and it will never change. However, this does not seem to be the case. After reading this article about this man and his repeated calls to Comcast threatening to cancel their service because of uncalled for price increases I remembered a time in my life when my family had a similar issue. We had Sprint cell phone service and we were on a family plan with a certain number of minutes and text messages (this is before smart phones and data plans) and as long no one on the plan went over the limit our set price shouldn't change. Yet, every month our bill would be a higher price. My mom had to call and fight with the people over their seemingly made up policies. What seems to actually be happening in these situations is that these companies are attempting to price discriminate by finding each individuals maximum price that they will pay for their service. They are accomplishing this by raising the price and coming up with reasons for why until this individual threatens to cancel and no longer use their service, and this seems to be the case with every internet, cable, and cell phone service around today. We eventually got fed up with Sprint and switched to Verizon, the service is better anyway. While the man in the articles is still fighting the struggle against Comcast and their price discrimination.
Tuesday, November 6, 2012
Chapters 3 and 4
Econ chapters 3 & 4
Diminishing marginal utility and marginal benefit are related in how much a good is valued. Marginal benefit is how much one values a good. Something such as a refrigerator, DVD player, or a newspaper, you really only want one of these items and that is diminishing marginal utility and one's marginal benefit of the first refrigerator could be somewhere around 2000 dollars but the benefit of a second would be zero dollars. However, if the marginal benefit of one of these goods were to decrease as an effect of a cause such as the industry standard changing from HD DVD's to Blu-Ray DVD's or a technological defect in refrigerators then one's marginal benefit of this good would decrease causing the entire demand curve for this good to decrease.The demand for these objects are also affected by their elasticity or inelasticity. In the instance of the HD or Blu-Ray DVD player this is an elastic good because it's not something every person needs to purchase. There are other options such as a normal DVD player or no DVD player at all.
Diminishing marginal utility and marginal benefit are related in how much a good is valued. Marginal benefit is how much one values a good. Something such as a refrigerator, DVD player, or a newspaper, you really only want one of these items and that is diminishing marginal utility and one's marginal benefit of the first refrigerator could be somewhere around 2000 dollars but the benefit of a second would be zero dollars. However, if the marginal benefit of one of these goods were to decrease as an effect of a cause such as the industry standard changing from HD DVD's to Blu-Ray DVD's or a technological defect in refrigerators then one's marginal benefit of this good would decrease causing the entire demand curve for this good to decrease.The demand for these objects are also affected by their elasticity or inelasticity. In the instance of the HD or Blu-Ray DVD player this is an elastic good because it's not something every person needs to purchase. There are other options such as a normal DVD player or no DVD player at all.
Sunday, October 28, 2012
AT&T
AT&T, A True Monopoly for the United States
AT&T had the virtual monopoly on all telephone service in the United States from 1918 until 1982. There were a few small local and regional telephone companies, but AT&T controlled all long distance during this time. Even the telephones themselves had to be from AT&T up until 1956. During this time the United States government had given AT&T exclusive rights to build long distance telephone lines. Therefore, the government supported AT&T saying that it was for public security. However, one has to wonder how much of this had to do the politics of the situation. The AT&T company still exists but they no longer hold the monopoly on telephone lines. The company broke up their monopoly to smaller companies to move into the computer industry. Also, with the advent of cell phones, landlines became less important and AT&T moved into this market.
AT&T had the virtual monopoly on all telephone service in the United States from 1918 until 1982. There were a few small local and regional telephone companies, but AT&T controlled all long distance during this time. Even the telephones themselves had to be from AT&T up until 1956. During this time the United States government had given AT&T exclusive rights to build long distance telephone lines. Therefore, the government supported AT&T saying that it was for public security. However, one has to wonder how much of this had to do the politics of the situation. The AT&T company still exists but they no longer hold the monopoly on telephone lines. The company broke up their monopoly to smaller companies to move into the computer industry. Also, with the advent of cell phones, landlines became less important and AT&T moved into this market.
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