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  • CH 9 PRICE DISCRIMINATION

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    shaheduzaman Shahed
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    Price discrimination is a pricing strategy where sellers charge different prices for the same product to different buyers, and the price differences are not cost-based. There are three degrees of price discrimination: perfect price discrimination charges each buyer the maximum price they are willing to pay; second-degree charges different unit prices for different quantities purchased; third-degree charges different prices in different markets or to different buyer groups. For price discrimination to be possible, the seller must control prices, be able to distinguish buyers willing to pay different amounts, and prevent arbitrage between buyers.

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    Ch 9 PRICE DISCRIMINATION

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    Price discrimination is a pricing strategy where sellers charge different prices for the same product to different buyers, and the price differences are not cost-based. There are three degrees of price discrimination: perfect price discrimination charges each buyer the maximum price they are willing to pay; second-degree charges different unit prices for different quantities purchased; third-degree charges different prices in different markets or to different buyer groups. For price discrimination to be possible, the seller must control prices, be able to distinguish buyers willing to pay different amounts, and prevent arbitrage between buyers.

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    3 views4 pages

    CH 9 PRICE DISCRIMINATION

    Uploaded by

    shaheduzaman Shahed
    Price discrimination is a pricing strategy where sellers charge different prices for the same product to different buyers, and the price differences are not cost-based. There are three degrees of price discrimination: perfect price discrimination charges each buyer the maximum price they are willing to pay; second-degree charges different unit prices for different quantities purchased; third-degree charges different prices in different markets or to different buyer groups. For price discrimination to be possible, the seller must control prices, be able to distinguish buyers willing to pay different amounts, and prevent arbitrage between buyers.

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    PRICE DISCRIMINATION

    PRICE DISCRIMINATION
    Price Discrimination
    A price structure in which the seller charges different prices for the product it sells and
    the price differences do not reflect cost differences.

    Perfect Price Discrimination


    A price structure in which the seller charges the highest price that each consumer is
    willing to pay for the product rather than go without it. discrimination among units

    Second-Degree Price Discrimination


    A price structure in which the seller charges a uniform price per unit for one specific
    quantity, a lower price for an additional quantity, and so on. discrimination among
    quantities.

    Third-Degree Price Discrimination


    A price structure in which the seller charges different prices in different markets or
    charges a different price to different segments of the buying population. discrimination
    among buyers.
    Conditions of Price Discrimination
    1. The seller must exercise some control over
    price; that is, it must be a price searcher.
    2. The seller must be able to distinguish among
    buyers who would be willing to pay different
    prices.
    3. It must be impossible or too costly for one
    buyer to resell the good to other buyers.
    Arbitrage, or buying low and selling high, must
    not be possible

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