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.
  • Price Discrimination

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

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