Likewise, this pricing technique tends to work best for products and services for which consumers will buy multiple units during a given period. Furthermore, second degree price discrimination knows only that people who buy small amounts will have high marginal valuations and people who buy large amounts will have low marginal valuation. So overall, those that buy small amounts will be less price sensitive than those that buy large amounts. Sam’s Club and Costco offers the ability to purchase in bulk which is essentially a good representation of second degree price discrimination. Additionally, customers who buy in bulk receive special offers and discounts that are not permitted to those that purchase single items. in which customers pick among the pricing options offered by the firm. As in the case with Sam’s Club there are packages in which allows buyers to choose the type of membership package they would like. Furthermore, larger quantities of a good pay a lower per unit price.
Likewise, this pricing technique tends to work best for products and services for which consumers will buy multiple units during a given period. Furthermore, second degree price discrimination knows only that people who buy small amounts will have high marginal valuations and people who buy large amounts will have low marginal valuation. So overall, those that buy small amounts will be less price sensitive than those that buy large amounts. Sam’s Club and Costco offers the ability to purchase in bulk which is essentially a good representation of second degree price discrimination. Additionally, customers who buy in bulk receive special offers and discounts that are not permitted to those that purchase single items. in which customers pick among the pricing options offered by the firm. As in the case with Sam’s Club there are packages in which allows buyers to choose the type of membership package they would like. Furthermore, larger quantities of a good pay a lower per unit price.