Management and Organizational Studies 2275A/B Lecture : 2.C - Block Pricing and Quantity Discounting.docx

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 2275A/B
• Professor: Desmond Mc Keon

Document Summary

Similar to quantity discounts, separate lo vs hi demanders via self-id. Extracts more revenue from the high demanders in a sense they pay. Text sells both as a way to "approach" perfect price discrimination; lower. The conservation effect: allow people to get water at low price, when getting close to quantity of "running out" you raise prices. Price is p" for up to q 0 units, but you pay only p"" < p" for any units more. Darren ignores this and buys q" < q0. Would the outcome have been different to if he was offered a quantity.