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What is inter-temporal price discrimination?
In the game of monopoly, it is important for the producers and sellers to verify to different strategies related to different pricing. A producer cannot fix a single price at a single product for a longer time. This way, they might lose the segment of consumers who are willing to buy the product on discount. And that’s where inter-temporal price discrimination comes in a role play.
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Under this strategy, the producer play with a pricing game for a different segment of customers demanding on how much they demand a specific product. Launching a new product is generally attracted by those consumers who demand the most for that particular product, and they are ready to pay to maximize price for the same. This is the initial segment of consumers categorized under the same table.
After the product is being delivered to this segment of consumers, the sellers focus on another category of consumers who wait for a little drop in the price in order to buy the similar product. And thus, they drop a percentage of the price to attract these segments of consumers.
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The last ones are generally those who wait for a clearance sale on the products. Their first priority is not that product, but rather how much they can save on that product on clearance sale.
When producers categorize the set of consumers depending on their elasticity of demand, it is known as inter-temporal price discrimination. This type of price discrimination offers different pricing at a different time for the different type of consumers.
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