Sample interview questions: Can you explain the concept of price discrimination and its potential impact on market power?
Sample answer:
- Price discrimination is a pricing strategy in which a company sells the same product at different prices to different customers or groups of customers. This can be done based on factors such as location, age, income, or willingness to pay.
- Potential impact on market power: Price discrimination can have a significant impact on market power, depending on the specific circumstances of the market.
- Increase market power: In some cases, price discrimination can help a company increase its market power. For example, a company that can successfully segment its market and charge different prices to different customer groups may be able to capture a larger share of the market and increase its profits.
- Decrease market power: In other cases, price discrimination can decrease a company’s market power. For example, if a company’s competito… Read full answer