The pricing policy of price discrimination.

Sample Solution

    Price discrimination is a pricing policy where businesses charge customers different prices for the same product or service based on certain factors such as time of day, age, and purchase date. This type of pricing strategy is used by movie theaters, airlines, and many other businesses to maximize profits. The economic reasoning

behind this practice is to allow companies to capture the greatest amount of consumer surplus by charging different prices that reflect each customer’s willingness to pay. For example, movie theaters may have higher ticket prices at peak times (such as evenings or weekends) when demand is greater than during off-peak times. Airlines may offer discounted fares during off-peak days or times in order to fill up planes that would otherwise be taking off with empty seats. By offering discounts for buying tickets in advance or purchasing multiple tickets together, companies are able to get more people into their flights/theaters while still charging them a higher price than those who book last minute; this allows the business to capture the full amount of consumer surplus from both groups of customers. An example of price discrimination I consider unfair relates specifically to airline tickets; i recently booked an international flight for my family only two weeks before our departure date yet were charged nearly double what we would have paid had we booked six weeks prior - despite no change in availability on either end! It seems unjustifiable because it suggests that people are being penalized if they can't plan far enough ahead - something which isn't always possible due to unpredictable life events such as illness or job changes - and therefore leaves certain groups unable access cheaper airfare options even when available seats exist at lower rates. Although some argue that differential pricing provides consumers with greater choice by allowing them flexibility in selecting between several options tailored according their specific needs or budget constraints, it also carries potential risks associated with exploitative practices designed primarily benefit large companies instead of protecting customer interests; after all, if there are any restrictions placed on one group’s ability take advantage discounted fares then not everyone has access equal opportunities obtain best deals which could be deemed unfair discriminatory depending perspective taken . In conclusion, while price discrimination can be advantageous for businesses looking increase profits maximize revenue potential from various segments their customers , there should also safeguards place ensure noone disadvantaged through practices including those described above . Companies need recognise importance treating equally not just within context legal regulations but also moral obligations provide fair opportunities everyone so none left out comparison shopping deciding buy products services .