Different prices
If consumers have different tastes and are willing to pay different prices for the same good or service, why do so many firms still charge a single price for so many goods and services?
Paper instructions:
In this question, the answer can actually start from the opposite case, (i.e. an industry in which price variability is common) in order to see why that industry may display special characteristics that many other firms in other industries do not enjoy.
For example, within the context of setting pricing policy in a budget airline, dynamic pricing would be the best policy for a firm to pursue. This is the most profitable pricing strategy for firms if every consumer’s willingness to pay was known ahead of time. Budget airlines can use the internet now and can therefore price according to a consumer’s willingness to pay on the basis of time to travel, how many bags they need, whether they want preferential seating and minimizing waiting times in line. In this case,
therefore, more dynamic pricing is possible.
There are other general constraints that firms face when attempting to differentiate prices for the same/similar good or service. These include:
1) Transaction/menu costs: these are costs associated with administering so many different prices and price changes. Imagine you own a restaurant and had to change the menu for every customer that comes. This would be costly.
2) Fairness: some consumers would react very negatively to price discrimination. Sports fans who buy season tickets often don’t like it when a team decides to make them pay more for a match against a more popular team, as they were also there to see their team play the worst teams in the league.
3) Inability to prevent re-selling: if a consumer can easily re-sell something then there is less of chance that a firm will depart from uniform pricing rule. This is why a service is easier to price discriminate than a product as a product can be re-sold but a service
often can’t (hairdressers charge women more for hair cuts because they value hair cuts more and cannot resell their service to their husband or boyfriends).
4) Informational requirements: Price discrimination requires lots of information on consumer preferences, which is often not available. Hence, the uniform pricing rule is chosen to save on these market research costs.
5) Finally, legal requirements prevent some firms from price discriminating, as in the case of essential pharmaceuticals where the state often mandates prices through medical insurance purchases or other means.
ORDER THIS ESSAY HERE NOW AND GET A DISCOUNT !!!
Our Service Charter
-
Excellent Quality / 100% Plagiarism-Free
We employ a number of measures to ensure top quality essays. The papers go through a system of quality control prior to delivery. We run plagiarism checks on each paper to ensure that they will be 100% plagiarism-free. So, only clean copies hit customers’ emails. We also never resell the papers completed by our writers. So, once it is checked using a plagiarism checker, the paper will be unique. Speaking of the academic writing standards, we will stick to the assignment brief given by the customer and assign the perfect writer. By saying “the perfect writer” we mean the one having an academic degree in the customer’s study field and positive feedback from other customers. -
Free Revisions
We keep the quality bar of all papers high. But in case you need some extra brilliance to the paper, here’s what to do. First of all, you can choose a top writer. It means that we will assign an expert with a degree in your subject. And secondly, you can rely on our editing services. Our editors will revise your papers, checking whether or not they comply with high standards of academic writing. In addition, editing entails adjusting content if it’s off the topic, adding more sources, refining the language style, and making sure the referencing style is followed. -
Confidentiality / 100% No Disclosure
We make sure that clients’ personal data remains confidential and is not exploited for any purposes beyond those related to our services. We only ask you to provide us with the information that is required to produce the paper according to your writing needs. Please note that the payment info is protected as well. Feel free to refer to the support team for more information about our payment methods. The fact that you used our service is kept secret due to the advanced security standards. So, you can be sure that no one will find out that you got a paper from our writing service. -
Money Back Guarantee
If the writer doesn’t address all the questions on your assignment brief or the delivered paper appears to be off the topic, you can ask for a refund. Or, if it is applicable, you can opt in for free revision within 14-30 days, depending on your paper’s length. The revision or refund request should be sent within 14 days after delivery. The customer gets 100% money-back in case they haven't downloaded the paper. All approved refunds will be returned to the customer’s credit card or Bonus Balance in a form of store credit. Take a note that we will send an extra compensation if the customers goes with a store credit. -
24/7 Customer Support
We have a support team working 24/7 ready to give your issue concerning the order their immediate attention. If you have any questions about the ordering process, communication with the writer, payment options, feel free to join live chat. Be sure to get a fast response. They can also give you the exact price quote, taking into account the timing, desired academic level of the paper, and the number of pages.