Sense Newegg Price Discrimination

Amazon can use 3rd degree price discrimination to divide customers into different groups and charge a different price to customers in different customers in different groups, but the same price to all consumers within the group. The firm will charge groups of customers prices relative to their demand elasticities. We can illustrate this on a graph:

Kohl’s pricing strategy has been the subject of illegal and ethical quandaries. Many opponents state that Kohl’s provides inflated deceptive reference prices. In 2013 a San Francisco appeals court permitted a lawsuit stating that the retailer falsely advertised sales pricing. (Los Angeles Times, 2013) Kohl’s appealed, only to lose as California courts permitted the lawsuits over the alleged false markdowns. While highly controversial other retailers have adopted a very resembling pricing model. In 2013 JCPenny implanted the Kohl’s sales strategies in its stores in an effort to revamp its struggling sales numbers. (Time 2013)

Price fixing and exclusive dealings are harmful for consumers and small businesses trying to compete with large businesses. The issues with price fixing is that the consumers have to buy an item for a certain price. There is no supply and demand, along with the fact that the prices can fluctuate without any certain pattern. As the prices become higher, the company get

For example, If you are selling a product that is a normal good with a high rate of competition in the market, raising the price could have negative effects on overall profits because users will simply find another substitute somewhere. Charles stated that market separation may come into play when firms realize there are differing elasticity curves for different consumers of the same product. Firms can maximize profits by evaluating consumer segments within a single market. If the firm notices different demand elasticity for different segments it may opt to engage in price discrimination to maximize profits. Charles gave Microsoft Office as an example; the same software is offered to students, casual users and business users at different price

According to Melvin and Katz (2015), Lian’s denial of promotion falls under the mixed motive theory of discrimination. Mixed motive theory applies when motives are both legitimate and discriminatory, thus providing protection under Title VII. Therefore, Lian must prove that his protected-class membership was a substantial factor in the outcome of the promotion denial. Once Lian establishes proof of discrimination, the burden to prove the decision was made for legitimate reasons shifts to the employer.

I have experienced third- degree price discrimination in the form of receiving a military discount of 10% on all purchases I make a Lowe’s home improvement stores. This form of price of price discrimination qualifies as third-degree price discrimination due to the fact that it applies only to a certain group active, honorably discharged veterans, their spouses, and their children 18 years of age and younger. This is a positive form of price discrimination for this group of purchasers, and being able to buy the same goods for less money than other purchasers is price discrimination (Sexton, 2012).

In all three degrees of price discrimination firms are able to make more profit and eliminate any excess capacity they may have. Firms are able to do this by charging higher prices to those consumers with a more price inelastic demand for their product. The firm is reducing the welfare of these consumers by changing them at the maximum price they are willing to

The article is related to my topic because it examines consumer racial profiling among Black students at (Historically Black colleges and Universities) HBCUs. Taking advantage of the large minority student population at HBCUs, the authors contacted colleagues at several HBCUs in Tennessee and Virginia, in order to solicit assistance in administering a (Consumer Racial Profiling) CRP survey. The CRP questionnaire was designed to determine the level and nature of the respondents' experiences as victims of CRP. The first dependent variable was a dichotomous variable—had the individual ever been profiled in a retail establishment? The second was an estimate of how often the persons been profiled. The research revealed that a large share of such

Generally a firm set “prices to attract new customers or profitably retain existing ones”(300). A firm could set prices low so that competition cannot enter the market or set prices at competitor’s level to keep the market constant. In the Trader’s Joe example, all of their prices are exceptionally low for high priced things even Trader Joe’s products can’t even be found anywhere else. This helps to eliminate competitors in an extraordinary

Colleges and Universities are involved in third-degree price discrimination defined as the difference of prices depending on the factors of gender, sex, geographical location and socioeconomic status.According to Boundless “Analysis of Price Discrimination” “Price discrimination exists within a market when the sales of identical goods or services are sold at different prices by the same provider. The goal of price discrimination is for the seller to make the most profit possible . Although the cost of producing the products is the same, the

A devastating hurricane has battered and beaten your little seaside town. Supplies are all but gone. One thing that everyone agrees on: they are in desperate need of generators. A man, generous enough to risk some of his precious money, buys generators and brings them to your area. Everyone is grateful, but before he can even sell one of them, the authorities arrive and arrest the man. His crime? He charged too much.

An example of a situation which a company might adopt a pricing objective to set prices low for a new product would be in order to establish market share. Pricing decisions are influenced by the need to compete in the marketplace, by social and ethical concerns as well as corporate image.

Price discrimination can be defined as when the same good or service is sold at different prices to different consumers. If we look at this definition of price discrimination, for an example, we can show that price discrimination can be seen in the entrance tickets of parks such as Universal studios; this is due to the fact that there are discounts for children and senior citizens. (Phlips L. , 1983) However, this can be seen as not being discriminative at all due to the fact that if the price difference full reflects the difference in the cost of carrying the good from the seller’s location to the buyers’ location.

They almost have complete control over their suppliers’ prices. In many ways it is a double-edged sword. Companies and entrepreneurs are able to reach their highest sales and profits once they get their products on the shelves of Wal-Mart’s stores. However, they have little to no say in the price at which their products will sell. Wal-Mart has used their incredible market power to dictate prices in the retail industry. Appropriately, Wal-Mart uses their advantage in terms of price in their marketing and advertising campaigns. If you type in the simple phrase, “low prices” into a Google search, the first hit that appears is Wal-Mart. Whether or not Wal-Mart actually offers lower prices on all of their products is a topic up for debate, but the battle where Wal-Mart has clearly emerged victorious has been in the arena of public perception. When the average consumer thinks of the simple phrase, “low prices” the first thing that comes to their mind is Wal-Mart, as evident of the Google search experiment.

This chapter sets out the rationale for price discrimination and discusses the two major forms of price discrimination. It then considers the welfare effects and antitrust implications of price discrimination.