15 Our Lady of Dollars Hospital needs to increase total reve

15. Our Lady of Dollars Hospital needs to increase total revenue to build a new chapel. The hospital wants to keep the total number of patients in each service area (emergency department, orthopedics ward, operating room, laboratory, cardiac ward) the same. How can the hospital use price discrimination to achieve this objective?

Solution

Solution: Hospital will use 3rd (Third) degree price discreminaton to achieve this objective.

Explanation:  1st degree price discremination is \"charging different price to each consumers based on their reservation price\". 2nd degree price discremination is \"charging different price based on the quantity purchased by consumers. eg. Bundle pricing. 3rd degree price discrimination is \" charging diffrent prices in different market segments. i.e. market is devided in to different segment and they each segment is charged according to tha market segment charecteristics.

Here we see that hospital is divided in to different segments like emergency department, orthopedics ward, operating room, ectc. So in order to increase the revenue and keeping equal number of patients in each service area, hospital will use 3rd degree price discremination.