Price discrimination is the practice of charging different customers different prices for the same product. ... It concludes that price discrimination is not inherently unfair. The article also contends that even when conditions i) and/or ii) do not obtain, price discrimination is not necessarily unethical .
What is price discrimination business ethics?
Price discrimination is a selling strategy that charges customers different prices for the same product or service based on what the seller thinks they can get the customer to agree to . In pure price discrimination, the seller charges each customer the maximum price they will pay.
What is unethical price discrimination?
Price discrimination is illegal if it’s done on the basis of race, religion, nationality, or gender, or if it is in violation of antitrust or price-fixing laws.
Is price manipulation unethical?
So the reason why price-fixing is illegal, and also unethical , is not that it hurts consumers. The key reason is that it violates one of the basic requirements for markets to work efficiently. ... So when companies engage in price-fixing, then, they’re not just acting unethically. They’re acting as bad capitalists.
Is discrimination ethical or unethical?
It’s never ethical to discriminate in the workplace. In the United States, however, discrimination against people based on their ethnicity, racial or cultural orientation is strictly forbidden under federal and state laws in all sectors, including the employment sector.
Is job discrimination ethical or unethical?
Sometimes people favor some groups of people over others as a matter of personal preference, or unconsciously accept stereotypes. Whatever, job discrimination is intentional or it is conscious, it is always immoral . Job discriminations violates utilitarian, rights and justice principles of ethics.
What are the ethical issues in Enron scandal?
Enron faced an ethical accounting scandal in 2001 after using “mark-to-market” accounting to fake their profits and misused special purpose entities, or SPEs . Enron worked to make their losses seem less than they actually were, and “cooked the books” to make their income look much higher than it was.
Why is price discrimination unfair?
Many people consider price discrimination unfair, but economists argue that in many cases price discrimination is more likely to lead to greater welfare than is the uniform pricing alternative—sometimes for every party in the transaction. ... It concludes that price discrimination is not inherently unfair .
What are the conditions of price discrimination?
Price discrimination is possible under the following conditions: The seller must have some control over the supply of his product . Such monopoly power is necessary to discriminate the price. The seller should be able to divide the market into at least two sub-markets (or more).
What is unethical pricing?
Price for Your Customers
Put yourself in your customers’ shoes if you’re ever in doubt whether a price is ethical or unethical. In most of these cases, unethical pricing occurs when you’re pricing for yourself —either to hurt the competition, skirt a law or regulation, or discriminate against or deceive consumers.
What companies use price discrimination?
Industries that commonly use price discrimination include the travel industry, pharmaceuticals, leisure and telecom industries . Examples of forms of price discrimination include coupons, age discounts, occupational discounts, retail incentives and gender based pricing.
What is price discrimination profitable?
ADVERTISEMENTS: Price discrimination will be profitable only when marginal revenues in different markets are the same . ... However, the monopolist can increase his total revenue by transferring his product from the market that has lower marginal revenue to the market that has higher marginal revenue.
Is price discrimination Good or bad?
Price discrimination can provide benefits to consumers, such as potentially lower prices , rewards for choosing less popular services and helps the firm stay profitable and in business. The advantages of price discrimination will be appreciated more by some groups of consumers.
Is vertical price fixing illegal?
Direct agreements to maintain resale prices are per se illegal in the United States and subject to “hard-core restriction” in Europe. ...
How can we avoid price fixing?
Avoiding Price-Fixing or Price-Gouging Laws
Avoid discussing future pricing (maximum or minimum) with competitors. Refrain from discussing with competitors any intention to charge emergency or other surcharges or eliminate discounts.
What is an example of unethical pricing practice?
What is an example of an unethical pricing practice? A company prices its products low in an attempt to drive its competitors out of business . ... A business charges a small company a higher price for a product than it charges a large company for the same product.
