What is price discrimination?

Price discrimination — this is a pricing strategy where a seller sets different prices for different groups of buyers for the same product or service.

The goal is to maximize profit, considering differences in customers' willingness or ability to pay.

Main types of price discrimination:

1. First-degree (perfect): individualized pricing for each customer, closely matching their willingness to pay.

2. Second-degree: prices depend on the volume of purchase or version of the product (e.g., discounts for large orders).

3. Third-degree: prices vary by customer groups (e.g., student discounts, senior citizen prices).

Example: airlines sell tickets at different prices depending on the time of purchase, class of service, and passenger category.