What is second degree price discrimination and third degree price discrimination? Explain with examples.

Expert Solution

Price discrimination is a business strategy used by the sellers where different prices are charged for the same goods or services.Price discrimination is categorized into three categories namely,First degree price discrimination,second degree price discrimination and third degree price discrimination.

Second degree price discrimination is when the seller charges different prices for different quantities consumed.

Example:Some companies,charge calls cheaper after ten minutes.Or when the sellers offer higher discounts for bulk purchases.

Third degree price discrimination is when the seller charges different prices for goods and services to different groups.These groups may be characterized on various factors like age,sex,location,time of use.

Example:Booking airline tickets,much in advance makes the ticket cheaper however booking the same ticket closer to the journey makes its costlier.

Some Ball games offer cheaper tickets to children as compared to adults.So the same ticket is charged different to different group of people.

Rahul Sunny answered 11 months ago

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