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International Economics

1.a) Define price discrimination.

b) What conditions are required for price discrimination to occur?

c) Is your workplace a price discriminator? If so, how is this price discrimination accomplished? If not, please provide an example of a private-sector for-profit business that practices prices discrimination and explain how this discrimination is accomplished.

2.a) Review the four arguments nations cite as justifications for trade barriers. Gerber discusses those arguments in Chapter 7 of International Economics. Which one of those four arguments would be the best justification for erecting trade restrictions to protect the industry that your workplace operates in?

Please note: If your workplace is not a for-profit, private sector firm, then choose a for-profit, private sector firm to use in answering this DQ.

Hint: Be careful you do not confuse an industry with a firm, such as your workplace. An industry is comprised firms; for example, Ford is a firm that operates in the automobile industry.

b) How did you determine the best justification for erecting trade barrier for the industry your workplace operates in?

3. Analyze the relationship among technology advancement, research &development, economic efficiency, and market structure. Please provide your professional experience examples.

Solution Preview

1.a) Define price discrimination

Price discrimination is when a company sells goods or products at various prices to a number of different buyers in order to get as much profit needed to maximize from the sales that occur. This means that a person has a huge product line to choose from, and a plethora of markets he or she sells to on a regular basis; consequently, people are able to get what it is they want and need at prices he or she can afford on a regular basis.

b) What conditions are required for price discrimination to occur?

Two conditions are needed when it comes to price discrimination. The first is that of between markets price elasticity is different. This allows companies to set a different range of prices for customers to choose from regularly. Second, barriers have to exist in order to prevent a customer from switching suppliers. Through this, the goal is to prevent people from switching from one place to another in order to get the necessary goods needed to survive. As a result, sales increase and so does demand because of using this particular strategy.

c) Is your workplace a price discriminator? If so, how is this price discrimination accomplished? If not, please provide an example of a private-sector for-profit business that practices prices discrimination and explain how this discrimination is accomplished.

Yes, ...

Solution Summary

This solution discussed price discrimination, examples and trade barriers.

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