What are the advantages and disadvantages of discriminatory pricing.
Answers
Answer:
Some groups benefit from cheaper prices.
Students typically have lower income so their demand is more elastic. This means they benefit from lower prices. These groups are often poorer than the average consumer. The downside is that some consumers will face higher prices.
Answer:
Advantage
Price Discrimination involves charging a different price to different groups of consumers for the same good. Price discrimination can provide benefits to consumers, such as potentially lower prices, rewards for choosing less popular services and helps the firm stay profitable and in business.
Disadvantage
Disadvantages of Price Discrimination
Under price discrimination, some consumers will end up paying higher prices (e.g. people who have to travel at busy times). These higher prices are likely to be allocatively inefficient because P > MC. Decline in consumer surplus
Explanation:
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