The extent to which price discrimination desirable.
Price discrimination is a condition where enterprises decide to ask for different prices from different groups of people or consumers for the same goods. Price discrimination a beneficial to the consumers in that they can access the goods at the lower prices a times price discrimination helps an organization or firm to stay so profitable and into the business. This
price discrimination will be so appreciative of more customers or consumers.
To what extent is price discrimination beneficial to the firm or an organization?
Promotes the investments of the organization or the firm .price discrimination facilitates the firm t0 be so profitable, these are by making the firm to invest any increased capacity. These can be explained using these examples. The airline that tries to maximizes its due or profit from the price discrimination can decide to carry out the investment by updating its aircraft to the newest or the latest technology in the market.
Enables some groups at least to gain benefit from the lower price in place. This means that when price discrimination is placed, it makes the firm reduce the price of goods to a group of consumers who might be so sensitive to prices. Times some groups are below the percentage of an average consumer.
It helps to reduce congestion. It is one of the methods to control demand. These were not in place, then controlling sectors such as rush hours in some towns could be so hard. A perfect example with the trains, they could be so overcrowded if price discrimination was not put in place, it gives some chances to a group of specific people to travel later during the day. That is to s mean, those groups of people who might wish to travel at the rush hours gain benefits from the less congestion.
It helps unprofitable organizations to control bankruptcy. Price discrimination, in most cases, helps the business or organization to t capitalize on a loss in the small profit, which is to show that organization business activities can continue instead of closing up the entire business. These can clearly be explained in the off-peak and peak hours, with price discrimination. I in accompany that controlling trains would be a great loss since controlling the congestion will be so hard.
References
Hahn, J. H., Kim, J., Kim, S. H., & Lee, J. (2018). Price discrimination with loss-averse consumers. Economic Theory, 65(3), 681-728.
Odlyzko, A. (2004). Privacy, economics, and price discrimination on the Internet. In Economics of information security (pp. 187-211). Springer, Boston, MA.
Wu, C. C., Liu, Y. F. Chen, Y. J. & Wang, C. J. (2012). Consumer responses to price discrimination: Discriminating bases, inequality status, and information disclosure timing influences. Journal of Business Research, 65(1), 106-116.