Overview
Price discrimination is a common pricing strategy used by businesses to maximize profits by charging different prices to different customers based on their willingness to pay. It can take various forms, including first-degree, second-degree, and third-degree price discrimination, each with its own c...
Key Terms
Example: A movie theater charges less for students than for adults.
Example: If a customer is willing to pay $10 for a coffee but pays $5, the consumer surplus is $5.
Example: If a 10% price increase leads to a 20% drop in sales, demand is elastic.
Example: Segmenting customers by age for targeted marketing.
Example: Negotiating prices in a car dealership.
Example: Bulk discounts for buying more than one item.
Related Topics
Key Concepts
Types of Price DiscriminationMarket SegmentationConsumer SurplusElasticity of Demand