Home  >  115 CFA  > Economics - Reading 13 - 6. Price Discrimination

6. Price Discrimination

f. describe pricing strategy under each market structure;

What is price discrimination? Price discrimination is a practice whereby a seller charges different consumers different prices for the same product or service. It converts consumer surplus into economic profit.

What is the difference between first/second/third degree price discrimination? - First-degree price discrimination is where each consumer is charge the price he is willing to pay - Second-degree price discrimination is where prices vary across units but not people - Third-degree price discrimination is when consumers are segregated by demographics or other traits.