"discriminators" - 1 õppematerjal

Monopolistic competition

insurance ­ Movies in the evening cost more than those in the early afternoon ­ Senior citizen, youth, and student discounts ­ New and used cars ­ Youth fairs on airlines ­ Evening meals in restaurants often cost more than the same meal at lunch Practicing Price Discrimination The firm that practices price discrimination must be able to distinguish between two or more separate groups of buyers Price discriminators must also be able to prevent buyers from reselling the product or service ­ For example, if a fifteen-year-old could resell his youth fare seat to an adult who could then use it, the price discrimination effort would fail Motives for Price Discrimination · In most cases, price discrimination is basically a mechanism for rationing goods and services The main motivation for price discrimination is to raise profits