Why will both groups of customers be satisfied with the deal?

Context

The idea that transactions in a marketplace work like an invisible  hand is to some extent the idea that when a person chooses to buy an  item at a given price, they are happy with the deal. There is no coercion. If the person really does not like the deal, they simply walk  away.

This week’s discussion will give you an opportunity to explore direct  and indirect price discrimination within the context of a hypothetical  scenario.

Instructions

For this discussion, use the following hypothetical scenario as the basis for your response:

• Your business partner is strongly opposed to your  proposal to charge your largest customers lower prices for your  web-based services than what you will charge your smaller customers. She  is arguing it is unethical, unfair, and possibly illegal.

Address the following in your discussion post:

• Make a case that both groups of customers will be satisfied with the  deal and that this is a perfectly legal form of pricing in a  business-to-customer relationship.
  • What degree is this type of price discrimination?
  • How will the plan increase revenue?
  • Why will both groups of customers be satisfied with the deal?
  • Why is this a legal form of pricing?
• Use evidence from your textbook or other reputable sources to support your case to your business partner.

Note: In your discussion posts for this course, do  not rely on Wikipedia, Investopedia, or any similar website as a  reference or supporting source.

Context

The idea that transactions in a marketplace work like an invisible  hand is to some extent the idea that when a person chooses to buy an  item at a given price, they are happy with the deal. There is no coercion. If the person really does not like the deal, they simply walk  away.

This week’s discussion will give you an opportunity to explore direct  and indirect price discrimination within the context of a hypothetical  scenario.

Instructions

For this discussion, use the following hypothetical scenario as the basis for your response:

• Your business partner is strongly opposed to your  proposal to charge your largest customers lower prices for your  web-based services than what you will charge your smaller customers. She  is arguing it is unethical, unfair, and possibly illegal.

Address the following in your discussion post:

• Make a case that both groups of customers will be satisfied with the  deal and that this is a perfectly legal form of pricing in a  business-to-customer relationship.
  • What degree is this type of price discrimination?
  • How will the plan increase revenue?
  • Why will both groups of customers be satisfied with the deal?
  • Why is this a legal form of pricing?
• Use evidence from your textbook or other reputable sources to support your case to your business partner.

Note: In your discussion posts for this course, do  not rely on Wikipedia, Investopedia, or any similar website as a  reference or supporting source.