Revision - Price Discrimination (presentation)
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Here is a revision presentation on price discrimination.
Most businesses charge different prices to different groups of consumers for the same good or service! This is price discrimination. Businesses could make more money if they treated everyone as individuals and charged them the price they are willing to pay. But doing this involves a cost – they have to find the right pricing strategy for each part of the market they serve – their revenues should rise, but marketing costs will also increase.
Price discrimination or yield management occurs when a business charges a different price to different groups of consumers for the same good or service, for reasons not associated with costs.
It is important to stress that charging different prices for similar goods is not pure price discrimination.
We must be careful to distinguish between price discrimination and product differentiation – the latter gives the supplier greater control over price and the potential to charge consumers a premium price because of actual or perceived differences in the quality or performance of a good or service.
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