Price discrimination is when a seller charges a single consumer different prices for different units of the same good.
In other words different consumers may be charged different prices for the same product or service.
Classification:
Perfect price discrimination -
The seller is able to sell his goods to the consumer at the maximum price he or she is willing to pay.
For example in movie theatres price of the same movie is based on the day and the chosen show time.
Second degree price discrimination-
The price of a good or service depends upon the quantity demanded. Hence, if a consumer wants a good in large quantities, lower prices are offered .
For example in a book sale it is often seen as when a person buys a book he is given less discount as compared to when he buys a number of books the discount increases.
Third degree price discrimination-
The price depends according to the consumer's attributes such as sex, age, gender.
For example Railway offers a discount of some percentage if the consumer is a senior citizen.
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