Price Discrimination Flashcards
1
Q
Price Discrimination
A
Practice of charging different customers a different price for the product which is unrelated to costs
2
Q
What is the purpose of price discrimination
A
to capture consumer surplus
3
Q
What is needed for price discrimination to work?
A
seller must prevent the resell of its product
it can differentiate its products
4
Q
1st degree
A
all customers pay a different price
(perfect price discrimination)
5
Q
2nd degree
A
(block pricing)
Price discrimination based on quantity discount)
6
Q
3rd degree
A
based on demographic, social, or organization membership
