Businesses use price discrimination to make more money by charging different prices to different customers based on how much they are willing to pay. There are three main types of price discrimination:
First-degree price discrimination: This means setting a price for each person based on how much they are prepared to pay. This helps the business earn more money.
Second-degree price discrimination: Here, the price changes depending on how much a customer buys. For example, buying in bulk often leads to discounts.
Third-degree price discrimination: This type charges different prices to different groups of people. For instance, movie theaters might charge students 20% less than regular ticket prices.
Research shows that businesses using price discrimination can boost their profits by as much as 30%, compared to charging everyone the same price.
Businesses use price discrimination to make more money by charging different prices to different customers based on how much they are willing to pay. There are three main types of price discrimination:
First-degree price discrimination: This means setting a price for each person based on how much they are prepared to pay. This helps the business earn more money.
Second-degree price discrimination: Here, the price changes depending on how much a customer buys. For example, buying in bulk often leads to discounts.
Third-degree price discrimination: This type charges different prices to different groups of people. For instance, movie theaters might charge students 20% less than regular ticket prices.
Research shows that businesses using price discrimination can boost their profits by as much as 30%, compared to charging everyone the same price.