Sample interview questions: Can you discuss the concept of price discrimination and its potential benefits for a business?
Sample answer:
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Price discrimination is a pricing strategy in which a firm charges different prices to different customers for essentially the same product or service.
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Potential benefits
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Increased Revenue: By charging different prices to different customers, firms can increase their overall revenue and profits.
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Efficiency: Price discrimination allows firms to allocate their products and services to the customers who value them the most, maximizing the overall economic efficiency.
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Consumer Surplus: Price discrimination can lead to increased consumer surplus, as customers with higher willingness to pay can access the product at a lower price, while customers with lower willingness to pay can choose the product at a higher price. This leads to a mutually beneficial outcome for both parties. <... Read full answer