| Course | BUSI 620 Global Economic Environment (BUSI620) |
|---|---|
| Module/Week | 6 |
| Assignment | DB Forum 6 |
| Paper type | Discussion thread and 1 reply |
| Length | about 509 words (thread and replies). Course guide: a thread of at least 300 words answering the forum questions with at least 1 citation in current APA format, and a reply of at least 150 words to 1 classmate's thread |
| Format | APA 7 citations and reference list |
| Points | 12 |
| School | Liberty University Online |
| Program | MBA |
| Where it sits | Module/Week 6 in Liberty's published BUSI 620 course guide; current sections can differ |
| Updated | October 2026 |
Free sample paper for BUSI 620 Week 6
Discussion Board Forum 6: Pricing Strategies for Firms With Market Power
BUSI 620 Global Economic Environment, Discussion Board Forum 6 (thread and 1 reply)
Thread by [Student Name]
The forum questions, the regional theater and the classmate's thread are composites standing in for the course's own; the research cited is real, and the requirements follow Liberty's public course guide for BUSI 620.
Thread
Chapter 11 of Baye and Prince (2017) explains that a firm can profit from charging different prices for the same product when three conditions hold: it has market power, buyers differ in willingness to pay in ways the firm can identify or induce them to reveal, and buyers cannot easily resell. Live theater meets all three. A composite regional theater has a local monopoly on its productions, its audiences range from season subscribers to students, and tickets are tied to dates and often to names.
The theater's prices show two degrees of discrimination. Seat sections, orchestra, mezzanine and balcony, and the gap between Saturday evening and Wednesday matinee prices are second-degree discrimination: the theater offers a menu and buyers sort themselves by what they will pay for a better seat or a preferred time. Student and senior rush tickets are third-degree discrimination, charging identifiable groups less because their demand is more elastic; requiring an ID at the door prevents resale.
How much does this matter? Leslie (2004) estimated a model of demand for a Broadway play using its actual ticket sales and compared the observed pricing with alternatives. The play's price discrimination improved the producer's profit by about 5 percent compared with a single uniform price, while the difference for aggregate consumer welfare was negligible. Price discrimination here moved money around among buyers more than it took money from them. He also found that the gain from changing prices as demand fluctuated was small once the observed discrimination was in place.
That last finding matters for a smaller theater considering software that changes prices daily. If it already prices by section, day and group, much of the available surplus is captured, and dynamic pricing may add little except customer irritation. A better use of its pricing effort might be two-part pricing for subscribers, a membership fee plus discounted single tickets, which the chapter shows can capture surplus from the most loyal patrons without raising prices for occasional ones.
Reply to Hannah
Hannah, you argued that streaming companies always earn more by bundling services, such as a video service with a sports channel. The textbook's logic suggests "always" is too strong (Baye & Prince, 2017). Bundling raises profit when valuations are negatively correlated: some subscribers love sports and care little for dramas, others the reverse, so a bundle priced near the sum of what a typical subscriber will pay for both captures more than two separate prices.
If valuations are positively correlated, the people who want sports also want dramas, bundling gains little, and a firm may do better selling separately or offering both options, which the chapter calls mixed bundling. There is also a competitive reason for bundling that the chapter only touches on: a bundle makes it harder for a rival that sells only one service to win customers away, since a subscriber who cancels the bundle loses both. That benefit may matter as much as surplus extraction in a crowded streaming market. Do you know whether the bundle you described is also sold as separate services, and at what prices?
References
Baye, M. R., & Prince, J. T. (2017). Managerial economics and business strategy (9th ed.). McGraw-Hill Education.
Leslie, P. (2004). Price discrimination in Broadway theater. The RAND Journal of Economics, 35(3), 520-541. https://doi.org/10.2307/1593706
What the BUSI 620 Week 6 instructions ask
In Module/Week 6, BUSI 620 assigns chapter 11 of Baye and Prince, two presentations, Quiz 6, Homework 6 and Discussion Board Forum 6, the last of the six forums. Students answer the posted questions about pricing strategies for firms with market power. Per the guide, the thread needs a minimum of 300 words and one or more APA citations, and a reply to one classmate must reach 150 words; twelve points ride on the forum. Chapter 11 covers markup pricing, price discrimination of three degrees, two-part pricing, block pricing, commodity bundling, peak-load pricing, cross-subsidies and transfer pricing, so most forum questions ask students to match a pricing strategy to a firm and explain why it raises profit.
How this BUSI 620 Week 6 example is built
The thread starts from what makes price discrimination possible, market power, different willingness to pay and a way to stop resale, and then classifies the theater's prices by degree: seat sections and matinee versus evening prices as second-degree self-selection, student and senior rush tickets as third-degree group pricing. Leslie's structural model of a Broadway play gives the size of the gain, about 5 percent of profit, and the surprising result that consumers as a whole were roughly unaffected. A paragraph applies the result to the theater's decision about dynamic pricing. The reply uses the textbook's bundling logic, negatively correlated valuations, to test a classmate's claim that streaming bundles always raise profit.
BUSI 620 Week 6 grading rubric: where the points go
In Forum 6 the 12 points go to complete, accurate answers on chapter 11's strategies, a thread of 300-plus words with an APA citation and a reply of 150-plus words. Graders look for each strategy named correctly and matched to its conditions: price discrimination requires market power, identifiable differences in willingness to pay and limited resale; two-part and block pricing extract surplus from individual buyers; bundling pays when valuations are negatively correlated; peak-load pricing follows capacity constraints. Supporting a strategy's effect with evidence, rather than asserting that it "maximizes profit," strengthens the thread. Clear structure, correct grammar and APA citations round out the grade.
BUSI 620 Week 6 help: mistakes that cost points
A frequent error is labeling every price difference as price discrimination. Prices that differ because costs differ, such as delivery charges, are not discrimination in the textbook's sense. Another is mixing up the degrees: group prices by age or student status are third-degree, while menus that let buyers sort themselves, such as seat sections or quantity discounts, are second-degree. Name the condition that makes each strategy work in your example, especially how the firm prevents resale. Use evidence where possible; a study that measures the profit gain is more persuasive than a claim. In the reply, test the classmate's strategy against its condition rather than simply agreeing that it works.
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BUSI 620 Week 6 questions, answered
What is BUSI 620 Discussion Board Forum 6?
The last of six 12-point forums, due in Module/Week 6, answering questions on pricing strategies for firms with market power from chapter 11 of Baye and Prince in a cited 300-word thread and a 150-word reply.
Where can I find a free BUSI 620 Week 6 sample paper?
This page includes a full BUSI 620 Week 6 forum: a thread on price discrimination at a regional theater with evidence from a Broadway study, and a reply on bundling streaming services.
What are the three degrees of price discrimination?
First-degree charges each buyer their maximum willingness to pay; second-degree offers a menu, such as quantity or quality tiers, from which buyers select; third-degree charges different prices to identifiable groups, such as students or seniors.
Does price discrimination hurt consumers?
Not necessarily; a study of a Broadway play found that its price discrimination raised the producer's profit by about 5 percent compared with uniform pricing while total consumer welfare was nearly unchanged.
When does bundling increase profit?
When buyers' valuations of the bundled goods are negatively correlated, so that people who value one good highly value the other less; the bundle then captures more of total willingness to pay than separate prices.
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