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...).

LT
Answered by Lucía T. Economics tutor

2006 Views

See similar Economics A Level tutors

Related Economics A Level answers

All answers ▸

How does business confidence affect the economic cycle? And why?


What is meant by an oligopoly being both interdependent and uncertain in their price strategies?


I have revised all the content for Economics but my essays are not reaching the top level, what can I do to ensure I get the highest marks?


Examine two reasons Company A plans to merge with Company B


We're here to help

contact us iconContact ustelephone icon+44 (0) 203 773 6020
Facebook logoInstagram logoLinkedIn logo

MyTutor is part of the IXL family of brands:

© 2025 by IXL Learning