The price Discrimination

Price Discrimination in the First Degree

Price discrimination in the first degree is uncommon but not non-existent. Most industries and businesses struggle to gain such a large market share that they can practice first-degree discrimination as monopolies. As a result, most ordinary consumers are unlikely to encounter first-degree pricing discrimination. I have personally experienced first-degree price discrimination when purchasing show tickets. The tickets were divided into multiple categories, which increased the cost for different people depending on how much they were ready to spend. For example, in their order, average tickets, VIP tickets, and VVIP tickets all doubled in price.\u00a0 There has also been a similar experience when viewing a film that is charged higher when you attend with the family and cheaper when its adults only for the same film showing in different sections. From these instances, it is deducible that the firms involved aimed to capture all the customer needs while capitalizing on the profit margin in every market segment. The non-discriminated prices accommodated a large number of consumers in great need of the products. The prices above the non-discriminated price, on the other hand, made sure that more money came when consumers placed large purchases.

The Benefit of Non-Discriminated Prices

The non-discriminated prices are a benefit to many consumers who are contesting for some of the limited products that provide an opportunity for first class price discrimination. Some of the consumers, therefore, feel that they are getting the same service at a lower cost. The other consumers who are willing to pay a higher price, on the other hand, take it as an opportunity to experience an elite experience of the same product.

Reference

Norman, G. (1999). The Economics of Price Discrimination. Edward Elgar.