We’ve all seen it before: the classic supply and demand graph. The theory of price is basically that graph: the economic theory that price for a good or service is based on the equilibrium where supply and demand meet.
The more demand there is for a limited good, the higher the price will be. The higher the supply, the less scarce it is, and the lower the price will be. Things like available substitute goods, seasonality, availability of raw materials, and market competition—all those outside forces you can’t really control—all factor in, affecting supply and demand.
And, of course, not all goods and services are created equal. Some goods have high price elasticity of demand, meaning that people change their behavior when prices change...while others have low price elasticity of demand, which means people will keep buying the goods, even when prices are changing.
The theory of price makes all of these outside forces endogenous. Supply and demand curves can rotate and shift, but at the end of the day, it’s the equilibrium that determines the price. In neoclassical theory, anyway.
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Cost Accounting: What is Price Discrimin...4 Views
And finance Allah shmoop What is price discrimination Oh well
it's kind of like any other form of discrimination on
ly with pricing Same product sold to different people at
different prices Those hundred golf balls at the range Yeah
there for students there Ten bucks for non students Fourteen
bucks They're not fair What about loans Democrats have hired
default rates than Republicans Is it fair to charge Democrats
higher loan rates Same product different price Well what about
hot dogs The hot dog vendor sizzle in Weiner's charges
Two bucks a dog for its white customers and five
bucks a dog for well everyone else Fair Not fair
Yeah that one's easy Not fair not legal What if
you had the opposite hot dog company one that wanted
to charge racist Mohr than non racist How about that
Fair Not fair Interesting Legally Not fair and not really
practical Most racist Don't wear an identifying armband Okay well
what about airlines Buying airline tickets Way in advance then
your Ah planner You get one price Maybe you're a
nervous Nellie and terrified you don't get the seven a
m to JFK six months from now so prices segmented
Teo you are high Or maybe you're a bargain hunter
willing to commit way in advance in return for a
discount Well different segment prices then are probably cheap too
You What about bar night entry fees Remember all of
those women get in free price discriminatory pricing nights Well
their intent was to change the bar scene from being
like eighty seven horny drunk men and well three terrified
women to making the social mores a bit more balanced
or evenly spread out So bars tried to balance things
by offering free entry to women But of course some
full sued the bars and claimed the practice was priced
discriminatory and one So yeah here's what those same bars
look like today So yeah that's price discrimination laws A
little bit unclear Yes Slippery slope and all that You've
got to do some thinking here to figure out what's 00:02:07.533 --> [endTime] fair and what's not eh
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