Management

jami
Please read below and write rebuttal

One example of a sophisticated pricing technique is price discrimination. There are three degrees to price discrimination. The second degree of price discrimination occurs when a seller sells a surplus of a product (or products) by offering discounts for multiple units purchased. This can occur with a buy one get one type of deal or large block pricing. Block pricing can often be found at stores such as Costco or BJ’s. These types of stores specialize in selling large amounts of a single type of product in large quantities. These types of stores can offer great deals on items but sometimes it doesn’t make sense to purchase items at these stores depending on your personal situation. For example, purchasing toilet paper in a large quantity can be useful – you will need it at some point and it will not expire or go bad. But other times there is only so much demand for certain types of products and it doesn’t matter how great of a deal something is or how many you will essentially get for “free” because it just won’t be used. For example, purchasing 2,000 one a day vitamins with an expiration date two years from now for personal use or consumption just doesn’t make sense unless you are planning on sharing or donating. Constraints for this type of price discrimination include the need for a membership card to use the store which limits the number of consumers and also a consumer at this store is typically not a single individual but someone purchasing for a large group such as a family. Another constraint of this type of pricing is the amount of people it limits purchasing an item. If someone is trying a new product, Costco or BJ’s should be the last type of store you purchase it at. These types of stores limit who will purchase products and what type of products.