1. Is it fair for businesses to charge different prices to different customers? (AACSB: Communication; Ethical Reasoning;...
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2. Go to www.answers.com/topic/price-discrimination?cat=biz-fin and research the “three degrees of price discrimination.” Does this discussion impact your opinion stated in question 1 regarding the fairness of this practice? Explain.
Businesses often charge different prices to different customers. For example, movie theaters charge less to students and senior citizens, and prices vary across times of the day. Women are charged more for dry cleaning and haircuts. Business flyers pay more than leisure travelers. And that person sitting next to you on the airplane may have paid more or less than you did—the same goes for hotel rooms. Consumers with arthritis pay more per milligram of pain relief when they buy the Tylenol Arthritis product than when they buy regular Tylenol, even though the active ingredient, acetaminophen, and dosage over an 8-hour period are identical. Technology offers marketers the ability to price-discriminate in various ways. For example, in 2000, Coca-Cola experimented with vending machines that raised prices at higher outdoor temperatures. Electronic shelf labels allow retailers to change prices based on supply and demand. Moreover, the Internet provides the capability for businesses to charge different prices on their Web sites to different customers of the same product.
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