According to the news published in Yahoo Finance, on April 15th pointed out that Australian women usually pay more than men for the same-cost products—especially grooming products like deodorant and razors. This is a marketing strategy, which calls Gender-based pricing and is very common in the United States. The reason why product-providers separate the market into two segments is that they can gain desirable profits from different groups of gender.
However, there are necessary conditions for successful price discrimination:
The firms must have some degree of monopoly power.
Different groups of consumers have different price elasticities.
A consumer cannot purchase at the low price and resell to others at a higher price.
The costs
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For the women group, the product provider discovers that women are in relatively inelastic razor market, since women tend to be willing to spend more on the grooming products than men. Despite a higher price(AR=MB), the quantity demanded of razor does not respond strongly to price changes. Rational Woolworths charges the higher price for women so as to earn more profit. With an inelastic demand curve, an increase in price of razor cause a decrease in quantity which is proportionately smaller. Consequently, total revenue of Woolworths …show more content…
As aforementioned, pricing maker charges a lower price for the consumers in the elastic sub-market like students. Therefore, they might enjoy the same products with a lower price. In most cases, the consumers in the inelastic sub-market are more affluence and able to pay at a higher price. It does not influence over their well-being at all if an increase in price which is affordable. By and large, price discrimination is acceptable for society as a whole, if the influence on stakeholders is trivial or the differences among two price is