Price Discrimination Research Assignment Paper

Price Discrimination
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Price discrimination
Price discrimination is a practice where sellers charge consumers based on how much the certain consumers are willing to pay. Sellers charge different prices for the same goods, but for different groups of people (Cuellar & Brunamonti, 2014). For example, students can get discounts or receive cheaper prices during off peak hours compared to peak hours. From an economic point of view, price discrimination is good because it gives a chance for those who cannot afford certain goods to access them while the company still make profits by charging those willing to pay more (Cuellar & Brunamonti, 2014).
Price discrimination is good because it makes scare products available to regular customers. There are certain situations where price discrimination is good for society because some groups of people can benefit from lower prices (Bergemann, Brooks & Morris, 2015). Using the price discrimination theory, a company reduces prices for specific groups of consumers who are sensitive to prices (Bergemann, Brooks & Morris, 2015). For instance, the company can consider students by offering them a 10percent discount because students have low income and rely on their parents for their upkeep while in college. These groups often have limited money to spend compared to average consumers. Therefore, everyone can benefit (Bergemann, Brooks & Morris, 2015).
Price discrimination eases congestion hence help in managing demand for services. If there were no price discrimination for instance, during rush hours, transport services would be overcrowded. Therefore, price discrimination gives an incentive for other people to travel later in the day. Those traveling during certain hours benefit from less...