Question

In: Economics

Should we shy away from specifying a collectively provided benefits package that is less generous than...

Should we shy away from specifying a collectively provided benefits package that is less generous than the standard package available to those who can afford to pay for it? Is the creation of a two-tiered system fair?

Solutions

Expert Solution

Most packages or products are designed on the basis of the needs and demand for products and services which can easily be sold to people in the economy respectively.

The packages are often thought of being able to be provided basis of paying capacity of people that demand for the product or service respectively.

It is common practice therefore by companies to sell its products in the market place to target different sectors of people differently.

Some people need general products while others are ready to pay a higher price for the same. The differences in approach by these people is the reason why companies prefer to target both the sectors independently and away from each other.

Some people have higher means to pay for packages that are different while others need those packages that are relatively similar therefore, in the market place it is necessary to offer both products than one.

Those, then wanting both can be satisfied. Also at a broader picture, this helps keeping price of those goods that are collectively required relatively lower, by making sure that the organization has enough money in earnings from those ones which were specifically targeted to get more revenue from the rich who could afford to buy goods with a higher price respectively.

Please feel free to ask your doubts in the comments section.


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