Firm discriminaion Flashcards
1
Q
Firm discrimination
A
when firms try to adjust prices based on what you are willing to pay
2
Q
what do firms need to know to achieve firm discrimination?
A
identity consumer surplus, how much it is and how to get it.
3
Q
Drip pricing
A
fees or add ons you thought was included in the initial price; slowly get you to pay more. ex: congestion, luggage fees, resort fees etc.
4
Q
Why do firms make prices difficult?
A
To confuse the consumer and maximize profit
5
Q
Why is drip pricing bad for consumers?
A
consumers dont know the final price. irrational purchases (small add on seems insignificant), over purchasing (budge to spend $50 when in reality you’ll spend $70), searching for true costs is time consuming
