Price Discrimination Essay Example

Price discrimination is a corporate strategy where a seller offers the same product to customers at different prices. This practice is a technique where sellers appeal to a wide range of customers and capitalize on opportunities to maximize profits. The word discrimination often has a poor connotation. However, in terms of finances, the word discrimination merely denotes to how sellers can sway market price in order to meet the demand of buyers. In the United States, price discrimination generally is discussed and debated at the higher education level. In higher education, price discrimination denotes a scenario where academies charge unlike tuition prices to students for the same quality of education. This practice can be done at both the university and departmental levels as well. In order for price discrimination to occur, the seller must have the ability to adjust price. Price discrimination is also used by a seller that is offering a product that has a strong consumer demand with few alternatives. This is done because customers are willing to pay more for a given product. This entry provides examples of price discrimination in the private sector and in higher education.
Price Discrimination Examples
An example of price discrimination in the private sector is the airline industry. In most cases, passengers sitting next to each other on any given flight did not pay the same price per ticket. Factors such as: one-way vs. round-trip tickets, duration of stay, promotions, and when the flight was purchased, all impact the overall price of tickets. The airline industry itself is able to control the market price for the tickets based on demand and the amount of passengers on the flight. Such price discrimination is use...

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