Search results
Results from the WOW.Com Content Network
Price discrimination (differential pricing, [1] [2] equity pricing, preferential pricing, [3] dual pricing, [4] tiered pricing, [5] and surveillance pricing [6]) is a microeconomic pricing strategy where identical or largely similar goods or services are sold at different prices by the same provider to different buyers based on which market segment they are perceived to be part of.
First-degree price discrimination The business charges every consumer exactly how much they are willing to pay for the product. Assume the monopolist determines the price of the product based on the maximum amount of money a consumer is known to pay for any quantity of product that is exactly equal to the demand price for the product in order ...
It is a sub part of the various forms of price discrimination and is classified as third-degree price discrimination. Opinions differ as to whether or not such practice constitutes unfair competition , but many governments take action against dumping to protect domestic industry. [ 7 ]
During discrimination, each segment of the market is offered a price so that the amount of surplus received from each customer group is at its highest level [11] and none of the market segments is unprofitable to a predominantly monopoly producer while cost-shifting is a solution to compensate for one group's lack of payment through another. in ...
What links here; Related changes; Upload file; Special pages; Permanent link; Page information; Cite this page; Get shortened URL; Download QR code
Examples include quantity discounting, bulk pricing and two-for-one offers. [43] Third-degree price discrimination prices products or services differently based on the unique demographic of different groups. Examples of third-degree price discrimination are student or senior discounts, or discounted travel tickets for last-minute buys. [44]
They have been extended in various directions. For example, it has been shown that, in the context of patent licensing, optimal screening contracts may actually yield too much trade compared to the first-best solution. [17] Applications of screening models include regulation, [18] public procurement, [19] and monopolistic price discrimination. [20]
English: Third-degree price discrimination. Instead of supplying one price and taking the profit (labelled "(old profit)"), the total market is broken down into two sub-markets, and these are priced separately to maximise profit.