On the phone from free calls go Top Design Nike Air Force 1 Low Womens Red White Shoes throughlast month to accept the 'First Financial Weekly' interview, China Mobile chairman Wang Jianzhou said, I first met Schmidt, chairman of Google. He asked me, in the future we call free of charge, only charge services and advertising on the phone how about the money? I say that no, that we have not cooperated. I came back very sigh, because I know this is a trend, you can not resist, but you now have to resist. Free phone calls, seemingly fantasy, the rapid development of science and technology had to be for you to seriously consider all possibilities. What are the benefits for free? There is no doubt, for a new product, free to bring more users, the product has been a great promotion. On this basis, the company can receive: the real user group's enormous concern about the possible accumulation of reputation costs could bring enormous benefits of scale to reduce the basic principle of free theoretical background microeconomics tells us, whether in any case , the maximum profit when marginal revenue equals marginal cost. In a perfectly competitive market, the price is a given market, changes in the yield of individual producers can not affect the market price, manufacturers are price takers. At this point, the marginal revenue equals price, so manufacturers have to constantly adjust production to make Latest Nike Air Force 1 High Unisex Black White Shoes their marginal cost is equal to the market price, in order to maximize profits. Positive profit will lead to other investors to enter the industry, making the market yield increased prices, the final price will be equal to the long-term average costs. When the long-run average cost and price are equal, profit is zero. Profit here refers to economic profit, rather than accounting profit. Because in economic profit, it is the presence of opportunity cost. So not to say that zero profit vendors, poor management, on the contrary, it does indicate that the industry is the existence of competing vendors, and investors get Nike Blazer Womens a reasonable return. For imperfectly competitive markets, different vendors can develop a different price for the product. At this time, the monopoly of production - the price curve is the market demand curve. Monopolist can also determine in accordance with the principle of marginal revenue equals marginal cost of its own production in the most profitable time, then according to their yield - the price curve to determine the price of products, rather than marginal cost. Theoretically, we should know by manufacturers marginal revenue equals marginal cost to select output and prices. But in reality, the average revenue and marginal revenue is usually more difficult to determine the marginal costs are relatively easy to measure. By deduction, we Nike Air Max 90 VT can also obtain the following formula ('microeconomics' P289): wherein, P is the price, MC is the marginal cost, Ed elasticity of demand for the manufacturers that demand with the magnitude of price changes. We can see that in a monopoly market, vendors are greater than marginal cost prices, and thus profits. On the other hand, manufacturers High Quality Nike Force 1 Mens White Blue Shoes of the greater elasticity of demand, the price closer to marginal cost, this market also, and fully competitive market closer. For example, the price of 24-hour convenience store is typically higher than the average supermarket, because demand for such convenience store less flexibility, customers are not price sensitive, which means that it is a monopoly. However, the monopoly does not mean high profits because of its low cost 2015 Latest Nike Shoes does not necessarily. Phone calls can free it? Based on the Jordan Spizike above theory, we can more clearly see the Internet free product easier, and now phone calls, broadband and other services free of reason is not easy. First of all, the Internet is closer to a perfectly competitive market, it is almost entirely the latter has four characteristics: price takers, product homogeneity, perfect mobility of resources and complete information. So manufacturers have to set the price on the marginal cost and marginal cost of Internet products is almost zero. Relatively speaking, the phone calls of service is more akin to oligopoly, monopoly pricing has a large. Second, even if the product is not the full sense of the Internet ideal perfectly competitive market, each firm has a high elasticity of demand, the impact of price changes on demand is obvious. That is why the completely free e-mail, chat tool such products on the Internet is difficult to survive in, the user can only be broken down, for the high-end user charges. However, the elasticity of demand is relatively small business phone calls, the user's needs and will not change the price of a significant change occurs, so monopoly oligarchs have adequate pricing. In other words, free does not give them more users, taking into account not entirely zero cost, the profit would not increase significantly. Why, then, free or trend? According to Ericsson announced on Akamai's The State of the Internet report from last year to the second quarter of this year, mobile data traffic has doubled, and more than twice the voice traffic. And they predict that the proportion of mobile data and voice traffic in 2015 will reach 30: 1. China Mobile interim report in 2011 showed that as of the first half, phone calls and monthly fee revenues accounted for 62.93% of operating income, value-added services revenue accounted for 32.17%, the data was essentially flat with last year. Meanwhile, the 2010 annual report shows revenue compared with 2009, value-added services and data traffic which increased by 15.2% and 49.4%, respectively. Almost at the beginning of this article referred to an interview while on September 16 while attending the 2011 Summer Davos Forum in Dalian, China Mobile chairman Wang Jianzhou said, voice revenue has limited growth in data traffic business is very important in the future. In the trend of rapid development of Internet data and value-added services, the use of mobile devices for browsing and entertainment needs will greatly increase, which will gradually become a new competitive carriers point, the operator has to invest more resources to provide better network services, mobile voice services as a commodity will become less important. Greatly reduce the user demand for voice services so that the elastic coefficient becomes larger, so that the price tends to marginal cost become possible. All this can not help but think of the early 21st century telecommunications giant ATT, face the dual impact of mobile communications and Internet data services, the former giant failed to complete the self-innovation, and ultimately put an end to the wave of the Internet. Therefore, mobile operators looking to bring mobile data revenue opportunities, but also must be prepared to deal with the many challenges posed by these opportunities, while continuing to provide users with more efficient voice service. ? Where profit as a marketing tool, free already existed for many years; however become a business model, but it is only in the Internet got really established. Free may bring more users, attention and reputation, but how to profit from them is another matter. Chris Anderson in the 'free' a book concludes, free business model usually has a direct cross-subsidization, three markets, free add several charges. Back to the beginning of this article Schmidt said the money received only services and advertising on the phone, with free voice service will lure users, data and other value-added services through to profit, which is a direct cross-subsidy model. With the huge user base, revenues from advertisers, which is a tripartite market model. High-end voice user charges, it is free plus pricing model. Note: The text in Figure 8.3,10.2 and formulas are from RSPindyck, DLRubinfeld, Zhang (translation), 2000, 'microeconomics', China Renmin University Press Contributor: NickyYe, the original link.