Question 12 of 21intermediate🔍 AnalyzeShort Answer2 marks

Can you think of a type of market where negotiation is less common and why?

Correct Answer

Negotiation is less common in markets where prices are fixed and displayed clearly, such as malls, supermarkets, online shopping platforms, and branded retail stores.

In these markets, prices are predetermined by the sellers or companies, and buyers either accept the listed price or choose not to purchase.

The reasons for fixed pricing include: large retail chains have standardized pricing policies across all stores, online platforms display fixed prices with no option for bargaining, and branded stores maintain fixed prices to protect brand image and ensure consistency.

Supermarkets operate on thin margins with high volumes, making individual negotiations impractical.

Additionally, government-run stores selling essential commodities at controlled prices have fixed rates.

The convenience of fixed prices saves time for both buyers and sellers, though buyers lose the opportunity to get lower prices through bargaining.

Exercise: THINK ABOUT IT | Q: 4 | (Page Page 6)
For More Understanding

Explanation

The chapter discusses negotiation and bargaining on page 6, explaining how buyers and sellers negotiate to arrive at acceptable prices. However, it also mentions different types of markets including malls and online markets (page 8) where fixed pricing is more common. The contrast helps students understand different market mechanisms.

Solution Steps

  1. Negotiation is less common in markets with fixed and clearly displayed prices

  2. Examples include malls, supermarkets, online shopping platforms, and branded retail stores

  3. Buyers must accept the listed price or choose not to purchase

  4. Large retail chains have standardized pricing policies across all stores

  5. Online platforms display fixed prices with no bargaining option

  6. Branded stores maintain fixed prices to protect brand image and ensure consistency

  7. Supermarkets operate on thin margins with high volumes, making negotiations impractical

  8. Government-run stores sell essential commodities at controlled fixed rates

  9. Fixed prices save time for both parties but eliminate bargaining opportunities