Hacker Newsnew | past | comments | ask | show | jobs | submitlogin

Price discrimination clearly involves profit maximization, otherwise the firm would have no incentive to carry it out in the first place. The movie theatre is not practising price discrimination because it's dedicated to some noble goal of clearing the market.

As mentioned above, your method has essentially extracted all possible consumer surplus and shifted it over to the producer. I'm not sure why this is a good thing; every consumer is purchasing at the maximum price they would be willing to pay, which means they're actually getting the minimum amount of utility out of it, while the producer is getting a huge amount of utility (all that surplus).

Furthermore, you seem to be ignoring the fact that money can be spent on more than one product. No, I am not happy as I can be if I'm charged the maximum amount for each product I purchase because that limits my overall utility as I can't purchase as large of a consumption bundle.

Finally, in your example, you say no economic value was created because those students did not get to spend the 70 pounds on the movie theatres. You're implying that the money somehow goes to waste, which is not true. More likely, they'll go purchase a substitute good (dvd rentals, student plays) and increase GDP via consumption through that.



Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: