Asked by Sarah Saintilus on Jul 17, 2024

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​The idea behind price discrimination is

A) ​To be able to sell to high-value customers,who value the product most
B) To be able to sell to the marginal customers,who are indifferent about the purchase
C) To be able to sell to the low-value customers,who would otherwise not buy the product
D) ​To be able to sell to both high and low value customers at different prices

Price Discrimination

A pricing strategy where identical or substantially similar goods or services are sold at different prices by the same provider in different markets or to different buyers.

High-value Customers

High-value customers are individuals or entities that generate a significantly higher profit margin or revenue for a business compared to the average customer.

Low-value Customers

Customers who contribute minimally to a company's profitability, often requiring more resources than they generate in revenue.

  • Gain insight into the theory of price discrimination and how it is applied in varied business environments.
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MA
Maria AlvirezJul 23, 2024
Final Answer :
D
Explanation :
Price discrimination allows companies to sell to both high and low-value customers at varying prices. By segmenting the market and charging different prices to different groups of customers, companies can maximize their profits by capturing more revenue from those willing to pay a higher price and increasing demand from those who would not otherwise buy the product at a higher price. This strategy is common in industries such as airlines, hotels, and entertainment where prices can vary based on when the product is purchased, the time of day, or the day of the week.