Concept of Price discrimination and its types
Price discrimination is commonly called monopoly price discrimination. In such a situation monopoly firm charges different price from the customer for the same product and the buyer has no choice but to buy it because of having no close substitutes. Price discrimination is of three types:
1.) First degree price discrimination: here the monopolist charge different price according to the paying capacity of the consumer. For example the charging less fees from poor students.
2.) Second degree price discrimination: in such a situation the monopolist charge different price for different units of the same product. For example the government charge different price for different units of electricity.
3.) Third degree price discrimination: in such a case there is two type of market like in airways there is the option of executive class or economy class.