Price discrimination often takes place as diverse groups have dissimilar price elasticities for a particular product. That is an elaborative means of saying that they are more or less price sensitive. For instance, last-minute air travelers are generally business people who have to be at some place fast, so they are less worried about price.
Our sensitivity to price is repeatedly correlated with the number of substitutes there are for the good in question, and how close we distinguish those substitutes to be. The more, and the closer, the substitutes, the more price sensitive people will be, and the more probable firms are to lower the price for them. If it is true that men identify that many of these products, cosmetics for instance, are …show more content…
Woman may not consider purchasing a product targeted towards men as an option, even if it costs less. It is simple economics that as long people are willing to pay a premium, certain product will continue to cost more. Of course, this also means that consumers' spending decisions can have real power.
Another aspect of Pink tax is the ‘tampon tax’, which is a tax on sanitary products, introduced way back in 1973. Presently, menstrual items are retail/consumer taxed at 7% in the USA from 17.5% in 1973.
My opinion is that the tampon tax should be nixed for the reason that menstrual products are a necessity and therefore should not attract the goods and services tax (GST). The GST being flat and consequently, a regressive tax, it hits low income women harder, because they spend a higher proportion of their income on necessary