CASE STUDY “Malaysia Airline: Flight from Malaysia – United State of America”.

This section must be written as an essay. You must first demonstrate that the company has some power to set its own price (that is, it has some degree of market power) – e.g. what is the structure of the industry it operates in? What is its market share for the product? How concentrated is the industry?

You must then use economic analysis to evaluate the pricing strategies your firm has adopted for its main product(s). Make clear comparisons between the predictions of the economic theories and the empirical evidence for your firm. Are the strategies adopted by the firm optimal? If so, why? If not, why not? How might they be improved?

Follow this structure

• INTRODUCTION
• OBJECTIVE
• JUSTIFICATION OF THE COMPANY
• THE INDUSTRY ANALYSIS
• MARKET STRUCTURE
• MARKET POWER
• MARKET SHARE
• ANALYSIS OF THE PRICING STRATEGY
• DESCRIPTION
• ALTERNATIVE PRICING STRATEGIES
• BUNDLE PRICING
• PREMIUM PRICING
• COMPETITION PRICING
• THE SKIMMING STRATEGY
• RECOMMENDATIONS
• CONCLUSION

Key points:

• Consumer behaviour and rational choice
• Estimating demand
• Production theory
• Monopoly power and cost plus pricing
• Pricing strategies

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