Many times we get to know from our friends and relatives that they got the same product that we have also bought and from the same seller but at a different price. This is called price discrimination.
Price discrimination is the practice in which the sellers sells the same product at different prices to different customers. This is a strategy by the sellers to get the maximum possible revenue from a product or service.
There are 3 types of price discrimination:
1) Perfect price discrimination.
2)Market per segment based price discrimination.
3) Price discrimination by self selection.
Example for price discrimination:
We can see price discrimination at the time of festival and wedding seasons. Different people have different income levels. At start they offer the goods at certain price, then on the peak days of that festival or wedding seasons, they charge different price for the same product to earn the maximum profit. They change the price even after 1 hour or 2 hours. And because it's a festival time, then everyone has to buy that product, so the sellers sometimes based customer's income levels or based on their immediate requirements, increase the price of their goods.
Price discrimination can be done in case of bulk orders. Suppose, a saree seller sells a saree at Rs. 1000 to a customer if 1 saree is purchased. But if a customer is taking 10-15 sarees, then the seller decrease the price per saree at 800 or 900 per saree. So saree is the same but price is different.
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