Question

Explain a time you encountered non-uniform pricing, or price discrimination. Identify the type of price discrimination it was. Using the criteria necessary for price discrimination, evaluate how well that good fit price discrimination. Finally, evaluate the effect such price discrimination has on you and society.

Your journal entry must be at least 200 words in length. No references or citations are necessary.

Answer 1

Price discrimination is a practice where customers in certain groups can be asked to pay more or less based on certain demographics or on how they value the product or service in question.

First-degree discrimination (Perfect price discrimination) When a business charges the maximum possible price for each unit consumed.

Second-degree price discrimination When a company charges a different price for different quantities consumed, such as quantity discounts on bulk purchases.

Third-degree price discrimination When a company charges a different price to different consumer groups.

The price discrimanation I experienced was during the payment of tution fees. All the students scoring A grade were given 20% discount and person scoring B were given 10% and then uniforn price for all the others. Here I experienced a Third-degree price discrimination which provided incentive to students who worked hard in their exams.

These type of price discrimination has a positive impact on the people. Price discrimination is a concept which is benifitial for the customers and suppliers. These concepts have a positive impact on the society.