Question

the manufacturer has put in place a price discrimination policy, where it charges its household customers more per unit than it charges its industrial users. the manufacturer wants to keep the retailer from arbitraging away the profits from the policy. the manufacturer should a. ​vertically integrate into the retail operations in the household market b. ​vertically integrate into the retail operations in the industrial market c. ​reward the household market retaile

Answer 1

The manufacturer wants to keep the retailer from arbitraging away the profits from the policy. the manufacturer should vertically integrate into the retail operations in the household market . Thus , Option A is correct.

What is Price descrimation?

• A selling tactic known as price discrimination involves charging clients various rates for the same good or service depending on what the vendor believes they can persuade the customer to accept.
• When a merchant uses pure price discrimination, they charge each consumer the highest price they will agree to. In more prevalent types of price discrimination, the supplier divides clients into groups based on particular characteristics and assesses a different price to each group.
• When a seller discriminates on pricing, each consumer pays a different price for the same good or service.
• The basis for price discrimination is the seller's conviction that specific groups of customers can be requested to pay more or less depending on their demographics or how much they value the goods or service in question.

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