4.1.5.7 Price discrimination

price discrimination

involves charging a different price to different groups of people for the same good

student discounts, loyalty cards, time of pruchase(early bird tickets)

Price Discrimination AO2:

firm is price maker, separate markets, different PED, low admin costs

conditions necessary for price discrimination:

Separate Markets, resales

conditions necessary for price discrimination: __________ ___________

The firm must be able to _______ markets and prevent _______(stopping an adult form using a child’s ticket). Prevent business travellers from buying discount tickets.

elastic, inelastic

conditions necessary for price discrimination: Different PED

Different groups must have elasticities of demand. E.g. students with low income will be more price _____ and sensitive to price. Business travellers will have more ________ demand.

cheap, separate, discrimination

conditions necessary for price discrimination: Low Admin Costs

It must be relatively ______ to _______ markets and implement price ____________