Price discrimination is a microeconomic pricing strategy where identical or largely similar goods or services are transacted at different prices by the same provider in different markets. In today’s society we see price discrimination in many places and you don’t even realize that it is price discrimination. Price differentiation is distinguished from product differentiation by the more substantial difference in production cost for the differently priced products involved in the latter strategy. It essentially relies on the variation in the customers' willingness to pay and in the elasticity of their demand. There are three different types of price discrimination. First Degree Price Discrimination involves charging consumers the maximum price that they are willing to pay. Second Degree Price Discrimination involves charging different prices depending upon the quantity consumed and lastly Third Degree Price Discrimination which involves charging different prices to different groups of people (EconomicsHelp, 2015).
Very recently an act of price discrimination against men erupted in the Soho district of New York. The pharmacy wanted to charge all men that
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Boxed.com has also stated that it would start lowering prices for female-orientated products that had higher costs than its male equivalent and lowering the sales taxes on certain items as well. This is now becoming more commonly known as the “pink tax”. This pink tax refers to the extra amount women are charged for certain products or services. Things like dry cleaning, personal care products and vehicle maintenance (Elliott, 2015). These types of promotions are causing an outrage among many man calling these types of promotions: sexist, bigoted, and deplorable. These same groups care claiming that this will hurt the business and others claim that it will help grow the business as awareness spreads on why it is being
How can we see this sort of discrimination first hand? Well, head to your local superstore, and check the toiletries section. The same manufacturer of razors, with the same amount of blades, will charge more for the pink women’s razors than a man’s blue razor. Shampoo and deodorants also show these same patterns, although they do have slightly different ingredients since men typically don’t wish to smell like roses or some sort of candy. Clothing is also a great example, because men’s fabrics are thicker, more durable, and usually cheaper. Women’s T-shirts and underwear are usually thinner and will wear out from wear or wash. Women’s jackets are thin, and usually require more layers to keep warm, which leads to more spending. Condoms are freely given out at rallies, concerts, schools, and online, yet you still need to make sure you keep some quarters on you if you happen to start menstruating in public.
market, there is price competition. This can lead to price wars and, therefore, lower prices for
People will say, “Why don’t you just buy the men’s products?” With this thinking, it beats around the bush and avoids the problems at hand. If one were to execute a solution of the Pink tax, genderless products like unisex razors and deodorants would be created. Instead of questioning women about their purchases of men’s products, question why there is gendered products at all. These products are necessities and the only justifiable difference between a man’s product and a woman’s product is just based on the fact of pink or feminine packaging and the targeted
The women in this case felt discomfort when they felt mistreated from their male managers in the form of sexism along with unfair pay and lack of promotions. In this case, a woman was told to doll up and to wear makeup in order to advance which is a perfect example of one’s boundaries being pushed while making them feel uncomfortable. The next conflict event was annoyance. According to the Huffington Post article regarding the case, there was a significant difference between the level of experience between male and female workers along with their opportunity for promotions. The male workers with less experience got promotions compared to the female workers with years of experience and positive performance reviews. Male workers were also paid more compared to their female coworkers. Being passed over for jobs was evident to the women identified in this case which lead to the awareness of gender discrimination, the next conflict event, in a diverse workplace with men and women with their only similarity being that they are Wal-Mart employees. The awareness of gender discrimination faced by thousands of female employees led to conflict, the last conflict event where a class-action lawsuit was filed against Wal-Mart despite them saying that they were a diversity encouraging, fair treatment, and nondiscriminatory company (Shapiro,
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.
Though there is no definitive date of when the pink tax began, news articles about it began to pop up in about 2009. Recently, there have been more articles about the “tax” as it is becoming more well known and it is growing to more products. Most women think this price difference
The idea of price gouging can have many different perspectives on it, and is very controversial. Price gouging is when a seller spikes their prices of goods, services, or other purchase products to a level higher than reasonable. Ethically, I do agree with the fact that merchants shouldn’t sky rocket their product prices during a state of emergency—price gouging.
Price discrimination is where a firm changes different consumers different prices for the same service.
As a consumer, we all get frustrated when we think a listed price is “too high” whether it is a necessity, and we have to buy it, or we just really want it. Some of the largest complaints by consumers today are directed towards the cost of goods. Marketing research has shown us that the costs of some items are being intentionally raised based on aspects of the individual who is making the purchase. The manipulation of prices can be broken down into three main issues: price fixing, price gouging, and price discrimination. Are there any positive or beneficial reasons to do this? Yes and no, the following paragraphs provide information about each practice individually.
State governments have passed legislation to regulate this so called ‘gender gouging,’ but protecting the pocketbooks of women requires making many more changes. Legislatures should change current regulations and create new legislation to protect women from gender-based pricing, and consumers should buy from manufacturers and retailers that have similar prices for products marketed to men and products marketed to women and should purchase the lower priced men’s versions when possible. This problem affects millions of Americans every day. Subsequently, many have attempted to change this injustice for many years and have had mixed results. The average person can help persuade the government, manufacturers, and retailers to change their actions and their policy regarding the issue of sexist pricing in many ways.“Pink Tax” is a general term used to describe the overall difference in price of women versus men’s goods and services. Ordinarily, this phrase encompasses several separate types of pricing and legislation, though. As previously mentioned, retailers charge different prices on items that are substantially similar based on a definition found by the New York City Department of Consumer
Predatory pricing is an exclusionary act by which a firm, in order to create or maintain a monopoly power, lowers its prices below the profit maximizing level in order to push rival firms out of the market or prevent them from ever entering the market. In the long run, this results to be a detriment to consumers. Once the competition has left the market, the company can then raise prices to a supracompetitive level and recoup the losses suffered by predatory pricing. This results in higher prices for the consumer. With no alternative product available, the consumer is left with no choice but to pay the high price.
there are a number of different buyers and sellers in the marketplace. This means that we have competition in the market, which allows price to change in response to changes in supply and demand. Furthermore, for almost every product there are substitutes, so if one product becomes too expensive, a buyer can choose a cheaper substitute instead. In a market with many buyers and sellers, both the consumer and the supplier have equal ability to influence price.
Coupons offered on certain items at a grocery store is definitely an example of price discrimination. The marginal cost to provide the good is the same for the store whether or not the customer redeems a coupon; thus, offering discounts to some of their customers is price discrimination. According to authors Roger LeRoy Miller, Daniel K. Benjamin, and Douglass C. North in, The Economics of Public Issues one of the three conditions that must be met in order for price discrimination to be successful in yielding higher profits is the company must be able to identify differences across consumers willingness to pay for the same product (p. 119). Ultimately the goal is to serve as many people as possible and offering different prices is one way to
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.
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.