Price Discrimination As A Path To Additional Profits

Price Discrimination As A Path To Additional Profits

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Price Discrimination As A Path To Additional Profits

Price Discrimination Essay

Price Discrimination: The Path to Additional Profits?

What is price discrimination? Here is some help with the basics. https://cdnapisec.kaltura.com/index.php/extwidget/preview/partner_id/956951/uiconf_id/38285871/entry_id/1_svaboiiy/embed/dynamic

The idea that transactions in a marketplace work like an invisible hand is to some extent the idea that when a person chooses to buy an item at a given price they are happy with the deal. There is no coercion. If the person really does not like the deal they simply walk away.

Given that background. Your business partner is strongly opposed to your proposal to charge your largest customers lower prices for your web-based services than you will charge your smaller customers. She is arguing it is unethical, unfair and possibly illegal. What degree is this type of price discrimination and how will the plan increase revenue? MAKE A CASE that both customers will be satisfied with the deal and that this is a perfectly legal form of pricing in a business to customer relationship.

PLEASE DO NOT RELY ON WIKIPEDIA, INVESTOPEDIA OR ANY OTHER PEDIA AS A REFERENCE AT ANYTIME IN THIS COURSE.

Example from one of my peers:

Price discrimination is when a firm sells goods or services to separate buyers for different prices. This could be for reasons that are not necessarily associated with cost. It creates greater revenue for the company. With the background given this is an example of third degree price discrimination. Larger customers will appreciate the deal they are receiving and purchase more at the lower price and will continue doing business with the company. Smaller customers will continue to purchase as normal, being none the wiser, that you are charging the larger customers less. This is a way to maximize profits for the company. By maximizing profits the web-based company can put more back into the company while also creating and innovating more product and growth.

You can also look at this from a second degree discrimination mindset if you look at it in a quantity scenario. Let’s say that the web-based company sells subscriptions to its site for certain online product uses, ranging from 1 day, 1 month, 6 months or 1 year. A larger customer is more likely to purchase a subscription or membership at a lesser price for 6 months or a year. They are saving money which keeps them a happy customer. Smaller customers may only purchase 1 day or 1 month for a higher price as they may not need the services for a full year or 6 months. Everyone gets what they need while the web-based company continues to build profit.

 

RUBRIC
Excellent Quality 95-100%	Introduction 45-41 points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.		Literature Support 91-84  points The background and significance of the problem and a clear statement of the research purpose is provided. The search history is mentioned.			Methodology 58-53 points Content is well-organized with headings for each slide and bulleted lists to group related material as needed. Use of font, color, graphics, effects, etc. to enhance readability and presentation content is excellent. Length requirements of 10 slides/pages or less is met.
Average Score 50-85%	40-38 points More depth/detail for the background and significance is needed, or the research detail is not clear. No search history information is provided.		83-76  points Review of relevant theoretical literature is evident, but there is little integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are included. Summary of information presented is included. Conclusion may not contain a biblical integration.			52-49  points Content is somewhat organized, but no structure is apparent. The use of font, color, graphics, effects, etc. is occasionally detracting to the presentation content. Length requirements may not be met.
Poor Quality 0-45%	37-1 points The background and/or significance are missing. No search history information is provided.		75-1 points Review of relevant theoretical literature is evident, but there is no integration of studies into concepts related to problem. Review is partially focused and organized. Supporting and opposing research are not included in the summary of information presented. Conclusion does not contain a biblical integration.			48-1 points There is no clear or logical organizational structure. No logical sequence is apparent. The use of font, color, graphics, effects etc. is often detracting to the presentation content. Length requirements may not be met
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