Explain price discrimination
Understand the Problem
The question is asking for an explanation of price discrimination, which is a microeconomic pricing strategy. It involves charging different prices for the same product or service to different groups of consumers.
Answer
Price discrimination involves charging different prices to different customers for the same or similar product.
Price discrimination is a strategy where a seller charges different prices to different customers for the same or very similar product or service. This is often based on what the seller thinks they can get each customer to agree to pay.
Answer for screen readers
Price discrimination is a strategy where a seller charges different prices to different customers for the same or very similar product or service. This is often based on what the seller thinks they can get each customer to agree to pay.
More Information
Price discrimination is common in many industries, including airlines (different fares for the same route), movie theaters (discounted tickets for matinees), and pharmaceuticals (different prices in different countries).
Tips
A common mistake is to think price discrimination is inherently unfair. While it can be, it can also increase accessibility for some customers by offering lower prices to those who are price-sensitive.
Sources
- Price Discrimination - Definition, Types and Practical Example - corporatefinanceinstitute.com
- What is Price Discrimination? Definitions and Examples | Indeed.com - indeed.com
- Price discrimination - Wikipedia - en.wikipedia.org
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