Price Discrimination

Week 3| Price Discrimination
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Businesses can “price discriminate” by charging a higher price to buyers with a more inelastic demand and a lower price to buyers with a more elastic demand. Supermarkets and department stores do this with coupons, for example. Coupon-clippers have a more elastic demand, so they are willing to spend time clipping coupons in order to obtain lower prices. People who are not eager to use coupons have a less elastic demand so they find it acceptable to pay higher, non-discounted prices.
In what other ways do you see “price-discrimination” play out in business? Does your company engage in price discrimination? Does your organization see price discrimination take place by some of your suppliers? [NOTE: For it to be “price discrimination”, the difference in price must NOT be due to differences in the cost of serving two groups of buyers.]

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