Answer to Question #164243 in Databases | SQL | Oracle | MS Access for amir

Question

Faisalabad Electric Supply Company (FESCO) distributes and supplies electricity to about 4.50 million customers within its territory with a population over 26 million under a distribution license granted by National Electric Power Regulatory Authority (NEPRA). The main determinant of electricity bill in Pakistan is the number of units consumed. Usually, electricity companies charge different prices as per kilowatt hour (kWh) to residential users, small commercial users and industrial companies etc according to the units consumed. For example, the approximate schedule of electricity tariffs for residential users is 5.79 Rs/kWh for 001-100 units, 8.11 Rs/kWh for 101-200 units, 10.20 Rs/kWh for 201-300 units, 17.60 Rs/kWh for 301-700 units, and 20.70 Rs/kWh for above 700 units. For commercial users, the approximate schedule of electricity tariffs is 18 Rs/kWh for sanctioned load less than 5 kW and 19.68 Rs/kWh for sanctioned load 5 kW and above. Similarly, for industrial users, the schedule of electricity charges is different.   Being a student of managerial economics, analyze the above case study carefully and identify which type of price discrimination is discussed in above case study. Also discuss the reason logically.

Answer 1

Price Descriminatiin :- Price descrimination is a strategy used by the organisation for selling their product or services ....Price descriminatiin is a practised where the organisation do because they belief that customer will pay more or less based on certain demographics ....

There are three types of price descrimination

1) First degree price descrimination

2) Second degree price descrimination

3) Third degree price descrimination

The case study basically the example of Third degree price descrimination ....

because third degree price descrimination occurs when price descriminate by charging the different price from different customer groups....Here also the charges of electricity price as per kilowatt hour differet from different customer groups ....like, Residential users , Small commercial users and industrial companies .....