Advertisements
Advertisements
Question
With the help of an example explain the meaning of price discrimination.
Advertisements
Solution
The act of selling the same product at different prices to different buyers is known as price discrimination. A monopolist can charge different prices from his different buyers easily. If a monopolist adopts a policy of price discrimination, the situation is called a discriminating monopoly.
Example:
- Indian Railways charge lower fares from senior citizens of the country as compared to other citizens.
- Electricity boards sell electricity at cheaper rates for agricultural use than for domestic use.
RELATED QUESTIONS
The image above shows a departmental store of a market structure.
- Identify the form of market as observed from the above image.
- Discuss the features of this market form with respect to:
- Type of product
- Entry and exit of firms
- Selling cost
Justify the following statement with any two valid arguments. 'In a perfect competition market structure, an individual firm does not have any role in determining price’.
A monopolist is price maker:
There is no difference between perfect competition and pure competition.
Products sold by each firm in a perfectly competitive market are perfect substitutes of each other.
A holiday resort in a remote village is very popular among the tourists. Since the connectivity is very poor with the outer world, the owner employs the local villagers for the functioning of the resort.
This is a case of:
Define perfect competition.
What is meant by pure competition?
What are selling costs?
State the market form of the following commodity.
Shampoos
Define monopoly.
Which type of market structure is the following? Give reason.
Trucks
Which type of market structure is the following? Give reason.
Jeans
Which type of market structure is the following? Give reason.
Ball-pen
What do you mean by homogeneous products?
What is the difference between perfect and imperfect oligopoly?
What does perfectly elastic demand curve faced by a competitive firm indicate?
Identify the market form from the following.
Price discrimination
Identify the market form from the following.
Perfect knowledge
