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Price Elasticity
Patch
Posted: 23 April 2012 20:06:59(UTC)
#11

Joined: 18/01/2012(UTC)
Posts: 5

I disagree with "[if sales drop] the salesman can then offer a substantial discount and the prospective buyer will think that he is getting a bargain"
A premium product will not be found at discounted price - the premiumness / exclusivity is maintained by this fact. Once the product is available to 'ordinary' people who would not normally be prepared to pay the inflated price it is no longer truly premium.
This is not the same as 'price fixing'. This is one brand deciding that the price of its products is set. Other makes are free to set a lower price for different items. Possible examples would be an Apple iSomething, Nespresso coffee or a Rolex watch.
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