Price

Discrimination
What is it?

Charging different prices for

the same products in different
markets.
Depends on:
The company’s monopoly
Preferences of the
customers
Uniqueness of the product
Willingness of the people
to pay differently

1 First degree

Strategy whereby firms fix the maximum price for each

unit of product and service. No consumer surplus.

2 Second degree

Refers to the price set per the

quantity consumed.
Eg-A mobile data recharge plan
is priced differently from the
amount of data used.

3 Third drgree

Occurs when firms divide their consumers into different

groups and sell the same products at different prices to
specific groups.
Eg-Infants can enjoy a flight free of cost, while anyone
above two has to pay for the flight tickets.