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For price discrimination to succeed, a seller must have market power, such as a dominant market share, product uniqueness, sole pricing power, etc. [9] Some prices under price discrimination may be lower than the price charged by a single-price monopolist. Price discrimination can be utilized by a monopolist to recapture some deadweight loss.
Price discrimination may improve consumer surplus. When a firm price discriminates, it will sell up to the point where marginal cost meets the demand curve. Some conditions are required for price discrimination to exist: Firms must face a downward-sloping demand curve, i.e. the demand for a product is inversely proportional to its price.
Pages for logged out editors learn more. Contributions; Talk; Third degree price discrimination
Most discrimination based on price occurs in situations without a standardized price list that can be compared against. In the cases of per diem charges, this is easily concealed as few consumers can exchange estimates and work rates, and even if they do the business in question can claim that the services provided had different baseline costs ...
Differences in the price of labor are sociological and political in nature, not a matter of personal preference, so that, e.g., native, unionized workers, who enjoy full political rights will demand higher wages and be more likely to resist employer prerogatives than undocumented immigrant, non-union workers from poorer countries.
From a theoretical perspective, it has been shown [26] that the three-degrees-of-influence property naturally emerges as the outcome of the interplay between social influence, or learning dynamics, and complex networks. These studies employed emblematic models to study the diffusion of information, opinions, ideas and behaviors on a wide range ...
Gender-based price discrimination is a form of economic discrimination that involves price disparities for identical goods or services based on an individual's gender, and may reinforce negative stereotypes about both women and men in matching markets. Race and class-based price discrimination also exists. [1]
Price dispersion can be viewed as a measure of trading frictions (or, tautologically, as a violation of the law of one price). It is often attributed to consumer search costs or unmeasured attributes (such as the reputation) of the retailing outlets involved. There is a difference between price dispersion and price discrimination. The latter ...