What are the different types of price discrimination?

First degree discrimination is charging the maximum amount that the consumer is willing to pay for a product. An example for this is auction. Second degree discrimination involves charging different prices depending on the choices f the consumer, such as quantity or time. For example, charging less for buying in bulk (Quantity), getting a free issue when collecting a certain number of coupons for a magazine (Quantity), or charging less to the customers that have been buying from the same firm for a long time (e.g.: loyalty cards) (Time).Third degree is the most common and it is charging different prices to different groups of people. Examples are student discounts or charging less to certain age groups (children, seniors...).

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Answered by Lucía T. Economics tutor

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