Question

Give an example of price discrimination from your own experience. Is this an example of perfect price discrimination, group price discrimination, or nonlinear price discrimination?

Answer 1

Price discrimination is the practice of charging a different price to different consumers for the same products or services. In my own experience, I have observed price discrimination by movie theatres. In movie theatres, the ticket price is different for seniors, adults, and children.

The price discrimination in movie tickets is an example of group price discrimination. In group price discrimination, consumers are divided into sperate groups (seniors, adults, and children) on the basis of various attributes and each group is charged a different price.