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Price Discrimination - Essay Example

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The researcher of this essay aims to analyze price discrimination, that is the way firms and chain of sellers sell at prices disproportionate of the products sold or buying at prices disproportionate to the marginal productivities of the factors bought…
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Price Discrimination
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Download file to see previous pages According to the research findings, customers can benefit from research and development as a result of increased revenue that companies earn. In the service industry, some of the customers will benefit from the low price on off-peak time and the firms will benefit on the peak time due to high prices on services and products. Some of the firms will increase revenues and be able to be a going concern in business and even expand.According to the research findings, customers can benefit from research and development as a result of increased revenue that companies earn. In the service industry, some of the customers will benefit from the low price on off-peak time and the firms will benefit on the peak time due to high prices on services and products. Some of the firms will increase revenues and be able to be a going concern in business and even expand.Price discrimination may attract administrative cost when engaging in market segmentation and predatory pricing may be funded by the profits gained . Since P>MC, some of the higher prices charge may be allocated inefficiently to the unintended consumer. Some of the customers may be charged high prices. The high prices may be unintended for the rich but the poor may end up also paying that high price (Patel, 2012). In conclusion, the rationale of price discrimination on shelves in supermarkets would be influenced by the type, the strategies used in pricing and the methods that influence price discrimination. Products that are placed at the top of the shelves will have a different price to those at eye level and bottom shelves. Price elasticity of demand also influences the products placed on the shelves as those products place at eye level to have more demand at relatively cheaper prices. Also, certain reasons would influence price discrimination in a monopolistic market such as, service that involves specialization or professionalism and geographical distance. Lack of availability of information also has an impact on price discrimination. ...Download file to see next pagesRead More
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