Customers whose demand has a higher degree of price elasticity will pay less.
<h3>How Does Price Discrimination Occur and types of Price Discrimination?</h3>
Price discrimination is a marketing tactic where sellers charge clients various prices for the same good or service depending on what they believe will win the customer over. A merchant that practices pure price discrimination will impose the highest price possible on each customer. The more typical types of price discrimination involve the vendor classifying clients into groups according to particular characteristics and charging each group a different price.
There are three types of price discrimination:
First-Degree Price Discrimination: when a company charges the highest price per unit of consumption.
Second-Degree Price Discrimination: when a business offers discounts for large orders or imposes various prices on customers depending on how much they eat.
Third-Degree Price Discrimination: when a business charges varied prices to various customer segments.
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The singular thing which is important for modern firms to build and maintain by conducting ethical and transparent transactions is:
<h3>What is Consumer Trust?</h3>
This refers to the belief which a customer has in a particular business, usually because of its ethical and transparent practises.
With this in mind, we can see that if modern firms fail to build this consumer trust, then they stand the risk of losing their customer base to their competition.
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Answer:
payback 2.5 years
Explanation:
the payback will be the point in time at which the project cash flow equal the invesmtent.
This method do not consider the time value of money so we don't have to adjust any period cashflow or outflow.
investment: 5,000
increase in cash-flow 2,000
Investment/cash flow = 5,000 / 2,000 = 2.5 years
The depreciation are not considered as this are not cash flow.
