Price discrimination

Price Discrimination
Name
Institution Affiliation
Price DiscriminationPrice discrimination is something that I experience quite often. A good example is the instances that I have traveled by planes. I have been charged differently for the same destination. Airlines usually charge varied prices depending on the season or even the day of the week. The rates during the holiday seasons, especially during Easter and August are usually higher than those charged in other months. The flights that take place over the weekend are normally lower than that of the weekdays, i.e., Monday to Friday. The prices are relatively higher during the holiday seasons because of high and inelastic demand. Even if the prices are higher travelers will still have to pay. Having learned that, I usually prefer traveling at a time when prices are relatively lower to take advantage of price discrimination. In this regard, I can say price discrimination at times provides a benefit for me.
There are various reasons why companies do price discrimination. First, it is one way of managing demand (Froeb, McCann, Shor & Ward, 2016). For example, if the companies didn’t discriminate prices, then there would serious congestion and overcrowding during rush hours. Secondly, companies also do price discrimination cut prices for consumers who tend to be sensitive to prices. They usually have less disposable incomes than average consumers. It is also beneficial to consumers since it increases their choices….