why does firms ser different prices in different geographical markets? For example, the IPOD in the USA and UK market
(prices to consumers were lower before tax in the USA than in the UK)
2007-01-27 10:32:41 · 2 answers · asked by Anonymous in Social Science ➔ Economics
Because prices, in part, reflect the costs associated with selling those products in those regions. These costs include shipping, storage, tarriffs, taxes, resgistration, labor, retail space, among others. All these things vary by region.
2007-01-27 10:50:45 · answer #1 · answered by mikie79 2 · 0⤊ 0⤋
UK, has a VAT taxes appiled to goods, unlike the USA that there can make a quite a difference in price when getting IPOD songs, but people in UK get around it all the time by shopping in France, or getting access to American CC. USA is the cheapest price because it could be its most competitive place for that product, or they dont tax online transactions. The tax I think plays the factor in the UK situation, and a lot of times people in UK go to mainland europe to buy goods because thier cheaper, and they not taxed the way they are in the UK. Mr Brown would not be happy losing tax dollars, but internet makes it likely transractions outside the home country of origin will grow when prices are cheaper for a similar product outside that coutry.
2007-01-27 18:54:24 · answer #2 · answered by ram456456 5 · 0⤊ 0⤋