Question

Make a list of real-world price discrimination practices. Do they meet the conditions posited for price discrimination?

Answer 1

Price discrimination is the practice of charging different prices from different persons for the same goods or services; and when all are charged the same who used to pay the high price will be better off and those who used to pay the low price will be worse off. For example airlines often charges different prices from different consumer depending on the quantity purchased. Generally high prices are charges from customer with inelastic demand and heavy discounts provided to wholesalers, consolidators, and tour operators. Similarly for the movie tickets discounts are given to students and elderly people, thus another example of price discrimination. A private doctor charges patients different prices for the same services depending upon their income; the third-degree price discrimination occurs when a doctor or theatre is charging a different price to different consumer groups