Essay On Price Discrimination

Price discrimination is a pricing strategy that charges customers different prices for the same product or service. In pure price discrimination, the business charges a customer the maximum price that they are willing to pay . This practice is becoming more and more important for customers because of the discrete ways that businesses are finding to make it easier to implement them in many different ways. These are categorized into three forms; First-degree price discrimination, second-degree price discrimination and third-degree price discrimination. First degree price discrimination is where consumers pay the exact price that they are prepared to pay and where the producer charges different prices depending on how much the consumer is looking
This specifically refers the the one thing that we can’t live with but can’t live without, the cell phone. The regular cell phone bill has the “At a glance” section that includes the monthly service charge and further down on the list of charges “other charges” or to the likes of this. But what exactly these mystery costs? If we look further inside the bill in the fine print areas all we are given is clever lengthy sentences purposely implanted to confuse the customer. If you try to contact these companies you are put through endless transfers until you are forced to hang up, without any answers. This is just one part of the price discrimination within the cell phone industry. Cellar plans offer a limited number of phone minutes per month. These minutes are based on peak and off-peak hours. During off-peak hours cell phone companies can provide a cheaper supply of minutes. Discounts are offered during non-peak hours because the cellphone companies want to encourage use at these times. Further examples include charging a high amount during introductory periods and then dropping the prices significantly (Ex. Apple reduced the price of the iPhone from $599 to $399 within two months of the product 's launch), periodic sales in stores (less price-sensitive customers prefer not to wait until the next sale), and offering coupons or rebates (poorer customers are ready to take the extra trouble involved in redeeming the coupons or claiming the rebates; wealthier customers typically do not bother). These practices are outrageously common and the prices of the plan and the hardware are forever increasing. This is simply due to the demand for these products. The demand will never cease so neither will the copious amount of price discrimination that are tacked