Price Discrimination Flashcards
1
Q
Price Discrimination
A
where firms charge different prices to different consumers for the same good/service
2
Q
Types of Price Discrimination
A
- First-degree Price Discrimination (perfect price discrimination)
- Second-degree Price Discrimination
- Third-degree Price Discrimination
3
Q
- First-degree Price Discrimination
A
this describes charging each customer the maximum price they are willing to pay - also known as the perfect price discrimination.
4
Q
- Second-degree Price Discrimination
A
Prices vary according to the quantity demanded of that good/service - involves bulk buying
5
Q
- Third-degree Price Discrimination
A
Prices differ based on consumer attributes such as age, location or economic status
