3.2 Price Discrimination

Content

What is price discrimination? 

First degree price discrimination

Third degree price discrimination

Conditions for price discrimination

 

 

 

3.21 What is 'Price Discrimination'? 

Charging buyers different prices for identical goods not because of the differences in cost (but because of the differences in demand or MV.)

Why does a monopolist price-discriminate?

 

 
Are the following cases price discrimination? 

Some cinemas offer discounts to students and the old.

Yes   No

University offers scholarship to some students but not all.

Yes   No

Insurance company charges younger drivers a higher premium.

Yes   No

During morning rush hours, mini-bus drivers charge a higher fare than during non-rush hours.

Yes   No

Some doctors charges two patients for the same treatment different prices

Yes   No

A landlord of a shopping mall charges the one who rents a larger area a lower rent per square feet.

Yes   No

 
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