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The high fixed cost and low marginal cost technology in this industries often lead to significant market power with the normal inefficiencies. In particular, prices often exceed marginal cost meaning that price benefits to price discrimination will be significant to the participants.
IT enables keen observation and analysis of consumer behaviour and hence certain market strategies that could not have been carried out before can be implemented
Faimus answered the question on February 3, 2018 at 13:43
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