Price Discrimination

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  • The recent crisis has led to demand recession in world economy. If we take Indian example then we all know that Indian economy is growing at a robust rate of around 7% so it becomes a very tempting proposition to for global suppliers to dump their goods in India. hence it is of critical importance to ensure that we do not becoming a dumping ground for cheap goods destroying our domestic industry in this period of global gloom.China recently raised the tariffs on number of goods such as luxury watches from 10% to 30%, cosmetics from 20% to 50% to avert such possiblities.

Transcript

  • 1. Price Discrimination
    Different Price to Different Customer
  • 2. Dumping
    • Effects of Dumping
    • 3. Recent safeguards by some countries.
    Example - China
  • 4. Loss of Consumer Surplus
    New Consumer Surplus
    Loss of Consumer Surplus
    ConsumerSurplus
    S
    S
    P1
    P
    P
    D
    D
    Q
    Q
    Q1
  • 5. Second Degree Price Discrimination
    S
    35
    30
    25
    D
    3
    1
    2
  • 6. InefficiencyTriangle
    Inefficiency Triangle
    MC
    ATC
    P
    ATC1
    MR
    D
    0
    Q
  • 7. X
    MC
    P
    ATC
    ATC1
    ATC2
    D = MR
    MR
    0
    Q
    Q c
  • 8. Third degree Price Discrimination
    MC
    AC
    P
    P
    P
    AR
    AR
    AR
    MR
    MR
    MR
    0
    0
    0
    Q a
    Q b
    Q
    Sub Market A
    Sub Market B
    TOTAL MARKET
  • 9. Cadbury and Big Bazaar
    over price Discrimination