Lesson 5: Price

1. Using the logic of the Standard Profit Equation, explain the importance of setting the

right price. What are the challenges we consider when pricing the product relatively low

and high? How is profitability affected by the wrong pricing decision?

2. Using the key learnings from the articles Apple's iPhone Launch: A Case Study in

Effective Marketing (Mickalowski, Mickelson, Keltgen, 2008) and the Economics of Apple

iPhone: Price discrimination or pricing error? (Chulkov,2014), discuss the danger of

wrong pricing and price variation technique. Support the discussion using the following

models: True Economic Cost, Perceptual Challenges in Pricing, and Prospect Theory.

3. According to the Price-to-Benefit Map model, how are opportunities for new product

variants at different price points created?