Forms (Basis) of Price discrimination
- Price discrimination according to personal income. This is where different prices are charged to different income groups for example charging low prices to the low income earners and high prices to the rich for the same service.
- Price discrimination according to sex and age. This is where different prices are charged for different sexes or ages for example higher charges may be fixed on tickets for a football match for adults and lower charges tor the children, lower charges on tickets for a dance for females and higher charges for males.
- Price discrimination according to status. Students or soldiers in uniforms may be charged lower than other groups of people for certain services like transport and entertainment.
- Price discrimination according to geographical factors. Price discrimination may be geographical, for example dumping where commodities are sold at lower prices in a foreign market as compared to the one charged in the domestic market.
- Price discrimination according to time of service. This is where different prices are imposed on consumers when getting services at different times or period e.g. film shows tend to be more expensive on weekends as compared to week days, evening dances are more expensive as compared to dances organized during day time.
- Price discrimination according to use. For example, during transportation, low transport charges can be charged on essential commodities and high transport charges for luxurious commodities.
- Price discrimination according to differentiation of product. This is where consumers are charged differently according to the class. For example seats in air transport, first class seats are charged higher amounts as compared to other classes.
8. Price discrimination according to the nature of the product. For example packed commodities are charged higher amounts as compared to unpacked commodities even if they are of the same quality.
CATEGORIES Economics
TAGS Dr. Bbosa Science