Categories
blog

A price-discriminating monopolist will follow a system where?

A recent study has shown that a monopolist will charge different prices for the same good to consumers with different incomes.

This is because they have an incentive to extract as much surplus from their customers, meaning they want to sell high volumes of goods at high prices.

For example, if you are wealthy and willing to spend more on luxury goods.

Then your price will be higher than someone who is not rich but still wants the product.

So when it comes down to it, there really isn’t any such thing as a “one-size-fits-all” pricing strategy.

The result is that consumers are experiencing different costs for what they buy, and often these charges are based on the customer’s income.

For example, if you’re wealthy and willing to spend more on luxury goods, then your price will be higher than someone who is not rich but still wants the product.

So when it comes down to it, there really isn’t any such thing as a “one-size-fits-all” pricing strategy.

dollars, currency, money @ Pixabay

Instead of following some predetermined system or set prices across all demographics arbitrarily determined by manufacturers/suppliers (which would just lead to arbitrage among customer types).

Firms should follow their own strategies in order to extract maximum surplus from each type of consumer . 

Leave a Reply

Your email address will not be published. Required fields are marked *