Price Discrimination Is a Controversial

Price discrimination is a controversial topic in the contemporary society, taking into account that many individuals feel that particular companies have immorally taken on monopolistic attitudes with the purpose of increasing their profits while others simply take advantage of the circumstances they are in and buy products without hesitating as a result of having the opportunity to do so at a low price. Public acceptance is a key element distinguishing between price discrimination that increases welfare and price discrimination that decreases it. Customers who feel that an event involving price discrimination is immoral are likely to refrain from buying products marketed within this campaign and are thus going to force the company in charge of the process to reconsider its strategies.

One of the typical examples of price discrimination is the one involving airplane tickets. Even though the passengers in an airplane hold similar seats and are likely to fly to the same destination, it is also probable that they paid different prices for their tickets. This is because of the circumstances in which they bought their tickets, as some might have bought their tickets cheaper than others because of the moment of their purchase. This has a general beneficial effect on customers, taking into account that they can buy cheap tickets if they organize their travels in a timely manner. Even with this, when airlines intend to harm their competitors by introducing cheaper tickets price discrimination does actually have a negative effect on the social order as a whole.

First degree price discrimination involves the seller providing the customer with the ability to pay exactly how much he or she is willing and able to pay. A good example of first degree price discrimination is an auction, taking into account that it is likely for the seller to add little to no surplus when auctioning a product.

Price discrimination is typically a means to increase profits, thus meaning that such concepts involve sellers having sufficient market power in order to be able to charge difference prices on account of diverse circumstances. Employing price discrimination practically influences buyers to want to buy more and thus benefits both buyers and the company using this technique.

Many people are likely to consider price discrimination to be unfair because of how it categorizes individuals. However, when considering the bigger picture, this marketing strategy enables a company to gain more profits for the products it is selling and provides numerous people with the opportunity to buy things that they otherwise could not afford. A person who has a fixed budget would take advantage of price discrimination by directing his or her finances to accomplishing a series of objectives. He or she would not have access to many concepts if it were not for price discrimination to provide him with the opportunity to do a series of things that he or she wants to do.