Honda is engaging in price discrimination and the possible rationale for the firm to charge high price in one market and vice versa due to difference in elasticities. There is a probability that in Canada people have elasticity of demand that is the reason, price charged is lower and quantity is higher. Where as in Japan, people have relatively less elasticity for Honda cars where they are willing to pay more for it, consequently higher price and lower quantity. Additionally there is some level of business sector power by Honda due to which Japanese individuals are not willing to move their interest to some other brand. (Keat, Young & Erfle, 2013)
Frequently, products going into the export market will be priced lower than those sold locally.
Frequently, products going into the export market will be priced lower than those sold locally.