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Essay On Price Discrimination

1585 Words7 Pages

PRICE
Price is amount of money that you pay to seller in order to get something e.g. if you want to eat a ice-cream there should be a certain cost for making the ice-cream and then the seller charged some amount of money from you.

PRICE DISCRIMINATION
Price discrimination is also known as price differentiation it defines as the pricing strategy where identical or largely similar goods or service are transacted at different prices by the same provider or seller in different markets. In other words we can say that the pricing strategy that charges consumers different prices for the same product goods and service. We can define price discrimination in many ways one of the other definition of price discrimination defines that the seller charge …show more content…

In this condition we describe the demand and the prices. When the demand of any product is increases, so the price is decreases. But when the price is increase of any particular product, so the demand is decreased ultimately. It is basically depends on the customer demands and their wants. If their demand is high or concern with the upper standards so the price elasticity is to be totally different. Whatever customer demand just based on the elasticity of price.
PROFIT IN PRICE DISCRIMINATION
Price is maximized when the marginal revenue is equal to the marginal cost because demand is more and it will become more inelastic. MR=MC

ADVANTAGES AND DISADVANTAGES
Price discrimination has so many advantages. It may help the companies to increase their profits and revenue when companies get the benefits from this strategy they may be have some disadvantages like that the some costumers are not pay a high price it may be the cause in consumer surplus.

CONCULSION
Price discrimination plays an important role in the economic world. It also plays an important role in our daily life. There are so many examples which are related to price discrimination. We can say that seller charge different prices from different customer or different group of peoples to adopt their profit or they may cause in increase in the firm revenue. Company uses this profit in their development and other department of the

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