Price discrimination occurs when firms sell the same good to different groups of consumers at different prices. There are often different types of price discrimination offered. Often they are categorised in the following way:. This petrol station is offering cut-price fuel for two days a week.
Oligopoly: Price Discrimination In The Airline Industry
Price Discrimination Project - College Essay Examples
Name Class Professor Due Date Price discrimination There are many strategies companies and individuals are using to drive sales. Price discrimination refers to a selling strategy that charges customers different prices for the same services or products basing their action on what they believe a seller can make a buyer agree to. Price discrimination gives the seller a chance to charge a customer the highest price they can settle on. The seller in this strategy, therefore, places customers in different units and charge them differently. There is also the incident of first-degree discrimination, the company charges the highest possible price for every unit consumed. In the second degree discrimination involves the giving of discounts and offers after-sales service for things bought in bulk, and lastly, third-degree discrimination entails different prices for different consumer groups.
Price Discrimination Price discrimination is charging consumers with different prices for identical similar products, which are not related to costs of production. An important point to mention, Products that varies in prices due to cost variation and justification are not considered as price discrimination. For example, charging different prices for the same product for different geographical locations does not result into price discrimination, because of the transportation or delivering cost differential. Price discrimination Price discrimination is a pricing strategy where the provider of goods or services is charging a different price to different groups of people for the same goods and services.
The primary reason for engaging in product differentiation is to avoid some of the ruinous effects of price competition. Anderson Producers are involved in a never-ending process of introducing new products and services and then observing economic behavior. By having several products, producers can experiment and watch economic behavior as consumers will focus on the features and products that are most desirable.