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Price discrimination exists when sales of identical goods or services are transacted at different prices from the same provider.

important condition for profitable price discrimination is that the percentage change in surplus (i.e., consumers' total willingness to pay less the firm's costs) associated with a product upgrade is increasing in consumers' willingness to pay. We refer to this as an increasing percentage differences condition and relate it to many known results

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Price discrimination is indistinguishable from dumping?

Price discrimination is indistinguishable


Why would a firm practice price discrimination?

price discrimination allows companies to defend


What are assumptions of price discrimination?

>The idea of price discrimination is to transfer the consumers profit to producers>Firstly there should not be any close substitutes available, because then people might use them instead. So price discrimination can occur in monopoly >Secondly the producer must keep the market separate, so that no resale of the product is possible>Thirdly two markets with different elasticity of demand. Price discrimination is successful when costs do not rise when selling on different markets


How many types of price discrimination under monopoly?

There are three main types of price discrimination under monopoly: first-degree, second-degree, and third-degree. First-degree price discrimination involves charging each consumer their maximum willingness to pay. Second-degree price discrimination offers different prices based on the quantity consumed or product version, such as bulk discounts. Third-degree price discrimination segments consumers into different groups based on observable characteristics, charging each group a different price.


What are the advantages and disadvantages of price discrimination to consumers and producers?

An advantage to price discrimination to producers is that firms will be able to increase sales. A disadvantage to consumers is that it can cause things to cost more.

Related Questions

Under which conditions is price discrimination possible?

discriminating possible and profiable


Price discrimination is indistinguishable from dumping?

Price discrimination is indistinguishable


Why would a firm practice price discrimination?

price discrimination allows companies to defend


What are assumptions of price discrimination?

>The idea of price discrimination is to transfer the consumers profit to producers>Firstly there should not be any close substitutes available, because then people might use them instead. So price discrimination can occur in monopoly >Secondly the producer must keep the market separate, so that no resale of the product is possible>Thirdly two markets with different elasticity of demand. Price discrimination is successful when costs do not rise when selling on different markets


What is fast food level of price discrimination?

Price discrimination is when the identical fast food item is sold for a different price depending on which store you purchase from. Typically, the level of price discrimination is higher from state to state and about the same for stores located in the same city.


What is the evidence of price discrimination at a local bar called the Stabilizer?

Which would be evidence of price discrimination at a local bar called the Stabilizer


What has the author Harry L Shniderman written?

Harry L. Shniderman has written: 'Price discrimination in perspective' -- subject(s): Price discrimination


Is it possible to eradicate discrimination altogether?

No.


How many types of price discrimination under monopoly?

There are three main types of price discrimination under monopoly: first-degree, second-degree, and third-degree. First-degree price discrimination involves charging each consumer their maximum willingness to pay. Second-degree price discrimination offers different prices based on the quantity consumed or product version, such as bulk discounts. Third-degree price discrimination segments consumers into different groups based on observable characteristics, charging each group a different price.


What are the advantages and disadvantages of price discrimination to consumers and producers?

An advantage to price discrimination to producers is that firms will be able to increase sales. A disadvantage to consumers is that it can cause things to cost more.


How does Sales growth decrease the value of a profitable company?

Explain how it's possible for sales growth to decrease the value of a profitable company.


How would price discrimination benefit you?

If you were the recepient of the increased prices.