Is Price Discrimination Beneficial and Desirable for the Society?

The following article will guide you to know whether price discrimination beneficial  and desirable for the society.

1. Beneficial to the Society:

Price discrimination is sometimes beneficial to the society.

For example:

Doctors charging low fee from poor patients and high fees from rich ones. Here poor patients will gain and charging discriminatory fee will be justified on economical and social grounds. It is not socially objectionable because rich people have capacity to pay more. Thus, the money is transferred from one group of rich persons to another group of rich persons.

2. Advantageous and Beneficial to Poor Class also:

From price discrimination poor people are also benefitted.

For example:

The railway fare charged by the railway company. First class passengers pay comparatively more, than the second class passengers for practically the same type of benefit. Therefore, the system of charging discriminatory fares is beneficial to the poorer classes.

3. Increases Revenue of a Firm:

Price discrimination provides higher total revenue to the firm. But the increased revenue goes to the rich monopolist firm although the general public is not benefitted.

4. It Increases Output and Provides Welfare to the People:

In some countries railway rates are lower for few priced commodities or essential commodities. This system is a type of price discrimination but economists have supported this view.