Re:Tesla flips a switch to increase the range of some cars i...
by stale2002 on Sunday September 10, 2017 @12:29AM
(#15210630)
It is common economic knowledge/theory. My citation is any economic textbook on price discrimination.
Let me give you an extreme example.
Imagine that a company perfectly knew the exact maximum amount of dollars that you personally are willing to pay for their product. Then, they offer you that product for 1$ less than your maximum.
This is called perfect 1st degree price discrimination, and results in ~zero consumer welfare, because consumer welfare is the difference between actual price paid, and max willingness to pay price, which in this case are both ~equal to one another.
Let me give you an extreme example.
Imagine that a company perfectly knew the exact maximum amount of dollars that you personally are willing to pay for their product. Then, they offer you that product for 1$ less than your maximum.
This is called perfect 1st degree price discrimination, and results in ~zero consumer welfare, because consumer welfare is the difference between actual price paid, and max willingness to pay price, which in this case are both ~equal to one another.