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Price discrimination is the business practice of selling the same good at different prices to different customers, even if the production costs for the 2 customers are the same.
price discrimination is impossible when good is sold in a competitive market, as many firms all selling at the market price → the firm must have some market power to price discriminate
Perfect price discrimination occurs when a monopolist knows each customer’s willingness to pay and charges each a different price.
Price discrimination can (1) increase the monopolist’s profits and (2) reduce deadweight loss.
Examples of price discrimination include movie tickets, airline prices, discount coupons, financial aid, and quantity discounts.
monopolists with single price
monopolists with perfect price discrimination

🪴 Quartz 4.0