A strategy in which the cost of a product to the consumer depends on the quantity of the purchased product. The more the customer takes, the less he pays for each unit. In the capital of Russia, a trip on the metro will cost less if you buy a travel card for several times. That is, the subway is pursuing a policy of price discrimination of the second degree.
Second degree price discrimination
This policy also provides for:
discounts;
discounts;
price surcharges;
inflated prices for new products;
flexible rates (cheaper gym importance of lawyer database membership during the day on weekdays, favorable price for seasonal goods, ticket price depending on the length of the route, etc.).
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Third degree price discrimination
Within this type of CD, a monopoly company sells goods to several groups of buyers with different elasticities of demand by cost. It turns out that the price does not depend on the type of product or the volume of purchased products. It is influenced by the type of consumers, who are divided into segments depending on their income and purchasing power. In essence, the company divides the market into expensive and cheap.
In the first, demand is low-elastic, which allows the seller to increase revenue by raising the price of the product. In the cheap market, on the contrary, it is highly elastic, which means that profits grow due to an increase in the volume of goods sold, which are sold at lower prices.