Question

In: Economics

What role does demand play in the ability to price discriminate? Why?

What role does demand play in the ability to price discriminate? Why? 

Solutions

Expert Solution

Price discrimination is done to increase the demans for a particular segment of the community, to encourage them to buy the product by offering them discounts or some other benefits which attract them to purchase them. It helps to increase the demand even from those people who were not interested in buying it but a sudden discrimination have forced them to do so. It has a major impact on the demand of the product and helps the firm to make higher profits with a larger customer base to work with.


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