Question

Give three examples of price discrimination around you. Discuss how the firm(s) was able to successfully price discriminate.

Answer 1

The three examples of price discrimination around me are.

1. Price charges by the Doctor to the patient. Here price discrimination is applied when a doctor is charged different prices to the different patient as per the priority basis. On a private visit, a doctor can charge a high price but on a General routine basis, the doctor will charge less so this is a very frequent example which I saw frequently.

2. The second example of price discrimination is frequent in the charges of Railways because in the Railways prices are as per the facilities provided by the Railways to the passenger as for the luxury of the compartment and the seats.

3. How the example of price discrimination is frequently applicable in movie theatres where the charges are again applicable as per the viewing angle.

Firms were able to successfully price discriminate because of the demand of the consumers.

The buyers or the consumers are demanding the special care and special facilities from the seller and this is the only reason why firms are charging prices according to the facilities provided by the seller to the buyer.