Overview
Second degree price discrimination is a pricing strategy where businesses charge different prices based on the quantity purchased or the version of the product. This approach allows companies to maximize their revenue by capturing consumer surplus, which is the difference between what consumers are ...
Key Terms
Example: A movie theater charges less for matinee tickets than evening tickets.
Example: If a consumer is willing to pay $10 for a book but buys it for $7, their consumer surplus is $3.
Example: A software company offers different pricing tiers for students and professionals.
Example: A smartphone brand offers various models with different features and prices.
Example: A wholesaler offers a lower price per unit for orders of 100 items or more.
Example: A collector may be willing to pay $500 for a rare coin.