Lecture 18 - Price Discrimination

Question 1

Define first-degree price discrimination in words

Answer 1

• different units of output can be sold at different prices
• different individuals can be charged different prices

Question 2

Define second-degree price discrimination in words

Answer 2

• different units of output can be sold at different prices
• but people who buy the same amount pay the same

Question 3

Define third-degree price discrimination in words

Answer 3

• all units sold to an individual (or a group) are sold at the same price
• but the unit-price may differ across individuals (or groups)