Price Discrimination
Table of Contents:
Definition of Price Discrimination
Price discrimination refers to the practice of charging different prices for the same product or service to different customers or groups based on factors such as consumer characteristics, willingness to pay, or market segmentation.
This strategy aims to maximize profits by capturing varying levels of value from different customer segments. While it can enhance revenue, price discrimination can also raise ethical concerns and may result in inequitable treatment of consumers.
What is Price Discrimination?
Price discrimination involves setting different prices for identical goods or services based on customer attributes, market conditions, or other factors.
Businesses implement this strategy to extract higher prices from consumers who are willing to pay more while attracting price-sensitive customers with lower prices.
Price discrimination aims to optimize profits by tailoring prices to different segments of the market, but it can lead to perceptions of unfairness if not properly managed.
