Discriminatory Pricing

Posted in Finance, Accounting and Economics Terms, Total Reads: 1947

Definition: Discriminatory Pricing

Discriminatory Pricing is the technique used by merchants to charge different prices for different products to different customers. The customers are distinguished on the basis of their ability to pay depending on attributes like income, age, geographical location, etc.

Perfect discriminatory pricing is said when the merchant charges the highest possible price to the customer depending on their ability to pay. But this is illegal, hence the merchants make groups of customers and charge prices as per these groups.

For example, in movie theatres, prices are charged as per seating arrangement depending on distance from the screen. In airlines, the prices are charged differently depending upon how early the tickets are booked from the date of flight.

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