Price Discrimination Cover Work - Price Discrimination Cover Work Rahil 11B 1 o A Price discrimination is a microeconomic pricing strategy where

Price Discrimination Cover Work - Price Discrimination...

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Price Discrimination Cover Work- Rahil 11B 18/11/16 1 o A Price discrimination is a microeconomic pricing strategy where identical or largely similar goods or services are transacted at different prices by the same provider in different markets. o B Price discrimination results in a loss of consumer surplus. However, some consumers that may now buy the product at a lower price may benefit as producers are willing and able to charge less, as seen on the diagrams below illustrating third degree price discrimination. Profits made in one market may allow firms to cross-subsidize loss-making activities/services that have important social benefits. For example, money made on commuter rail or bus services may allow transport companies to support loss- making rural or night-time services. Without the ability to price discriminate, these services may have to be withdrawn and jobs might suffer. 2 o There must be some imperfection of the market. If there were

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