price discrimination
Price discrimination is a pricing strategy where a seller charges different prices to different consumers for the same product or service. This is based on factors like customer willingness to pay, purchase location, or timing. For example, students may pay less for a movie ticket than adults, or airlines may charge varying prices based on when tickets are purchased. The goal is to maximize revenue by capturing more consumer surplus, allowing businesses to cater to diverse customer segments while increasing their profits.
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Price discrimination is a pricing strategy where a company charges different prices for the same product or service to different customers. This can be based on factors like age, location, or purchase quantity. The goal is to maximize revenue by capturing consumer surplus—essentially charging each customer what they are willing to pay. For example, movie theaters might offer discounts for students or seniors, while airlines often have varying fares based on when tickets are purchased. While it can benefit consumers in some cases, it can also lead to perceptions of unfairness.