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The Different Types of Price Discrimination. Business& Marketing Essay (Essay Sample)


The different types of price discrimination


Economics Question
Economics Question
The Three Types of Price Discrimination and the Information Required of Each
The First-Degree Price Discrimination
In business, first-degree price discrimination happens when the charges that the consumer pays for a product or service are the maximum possible rate per consumption unit. The business sets the price rate after identifying the surplus available meant for consumers. In application, the surplus is ridden off because individual customers pay differently for the same product or service quantity. Individual products or services usually possess varying price rates set by the business (Bergemann, Brooks, & Morris, 2015). The business determines the purchasing price that each customer has and sells the product at that specified rate. For instance, a customer can purchase Pizza at $10 while another can purchase the same quantity at $20. The price rates are dependent on the individual purchasing power and willingness. However, first-degree price discrimination is only theoretical (Bergemann, Brooks, & Morris, 2015). An organization can't implement this because the assessment of individual consumer’s willingness and purchasing power can be a functionally cumbersome and complicated process.

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