Analysis of Price Discrimination Research Paper

Analysis of Price Discrimination - Research Paper exerciseProduct pricing alike depends on the availability of competitors in the market and certain rules and regulations of the land.Price disparity is generally resorted for deeper penetration into the marketplace, to attract more customers from competitors or to attract certain segments. Price discrimination also might be used as a predatory pricing tactic, for setting prices below salute to certain customers, to harm competition at the suppliers level. At times this leads to legal battles. Price discrimination, also know as differential pricing may be defined as the practice by a lodge of charging different prices to the same buyer or to different buyers for the same commodity or serve well without corresponding difference in cost. This way we can define three syllabuses of discriminationSecond-degree discrimination The company charges different prices for blocks of units instead of for individual units e.g. different rates charged by an electricity undertaking for ignition and fan, for domestic power and for industrial use.Third-degree discrimination As long as the demand elasticities among different customers ar unequal, it will be profitable for the company to group the customers into separate classes according to elasticity, and charge each class a separate price.Some example of price discriminationAirlines offering a huge entailment on the destinations towards not very popular routes.Cinema and theater halls offering discounted tickets to students.Car rental firms carving prices at weekends.The hotel offers discounted weekend breaks.Air-conditioner and refrigerator companies offering discriminatory pricing during winters.Travel agencies offering discounts for families during the school holidays. ready reckoner manufacturers offering bargain prices when they go for newer versions and intend to offload the existing version quickly. Or sometimes when newer versions stimulate in the market simult aneously from more than two manufacturers, then also to attract the customer we chat price wars.Newspapers companies offering invitation prices for long duration or during weekends.