Price Discrimination
The monopolist often charges different prices from different consumers for the same product. This practice of charging different prices for identical product is called price discrimination. According to Robinson, “Price discrimination is charging different prices for the same product or same price for the differentiated product.” Types of Price Discrimination : Price discrimination is a common pricing strategy’ used by a monopolist having discretionary pricing power. This strategy is practiced by the monopolist to gain market advantage or to capture market position. There are three types of price discrimination, which are shown in Figure-13: The different types of price discrimination (as shown in Figure-13) are explained as follows: i. Personal: Refers to price discrimination when different prices are charged from different individuals. The different prices are charged according to the level of income of consumers as well as their willingness to purchase a product. For example, ...