PRICE DISCRIMINATION

Price discrimination



Price discrimination

Price discrimination breaks this attachment between prices and charges, in a way that is conspicuous for all to see. Several penalties follow. First, prices can no longer be relied on as an sign of shortage or a pointer to the cosmos of purchasers about where they need to economize. Though the most price-sensitive customers may face an incremental-cost cost under price discrimination, other customers will not, and may not make effective conclusions as a result(Krugman, 2007). Because economizing demeanor then no longer assurances effectiveness in the share of resources, the communal utility of the price system is ...