Price discrimination occurs when identical goods or services are sold at different prices by the same provider. It can be done based on factors like age, sex, quantity purchased, time of purchase, or income. There are three types of price discrimination: first degree involves bargaining with each customer, second degree charges different per-unit prices based on quantities purchased, and third degree charges different prices to groups differentiated by characteristics like location or age. Price discrimination decreases consumer surplus but increases firm profits and output, potentially benefiting social welfare and allowing more consumers to purchase products.

1. PRICE DISCRIMINATION WITH
PRACTICAL EXAMPLES
Diksha Gupta
100906031

2. WHAT IS PRICE DISCRIMINATION?
 Price discrimination or price
differentiation exists when sales of identical goods
or services are transacted at different prices from
the same provider
 Price discrimination is also when the same price is
charged for the consumer from different areas while
the cost of production is different.

3. DISCRIMINATION CAN BE DONE
ON THE BASIS OF:
 Age
 Sex
 Quantity purchased
 Time of purchase
 income

4. THREE CONDITIONS :
 Market control
 Different buyers
 Segmented buyers

5. TYPES OF PRICE DISCRIMINATION
 First degree price discrimination:
This first type of product pricing is based on the
sellers ability to determine exactly how much each
and every customer is willing to pay for a good.
The seller will take the time to bargain or 'haggle' with
the customer about the price that customer is
willing to pay.

6. SECOND DEGREE PRICE DISCRIMINATION
 Second-degree price discrimination takes place
when a firm identifies two or more different groups
with different demand elasticity based on the
quantities purchased
In this case the seller charges a higher per-unit
price for fewer units sold and a lower per-unit price
for larger quantities purchased.

7. THIRD DEGREE PRICE DISCRIMINATION
 A form of price discrimination in which a seller
charges different prices to groups that are
differentiated by an easily identifiable
characteristic, such as location, age, sex, or ethnic
group.

8. EFFECTS OF PRICE DISCRIMINATION:
 Consumer surplus decreases
 Firm profits increase
 Output is increased
 social welfare and equity
 More consumers will now buy the product

9. THANK YOU