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Question
With the help of an example explain the meaning of price discrimination.
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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
Following is not the feature of perfect competition:
'A few big sellers' is a characteristic of ______.
A seller cannot influence the market price under:
A monopolist is price maker:
There is no difference between perfect competition and pure competition.
A market where homogeneous products are sold with no control over price by an individual firm or a buyer is ______.
Match the following:
| Column I | Column II | ||
| A. | Monopoly | (i) | Availability of close substitutes |
| B. | Oligopoly | (ii) | Absence of close substitutes |
| C. | Perfect competition | (iii) | Few large sellers |
| D. | Monopolistic competition | (iv) | Homogeneous products |
Read the following statements carefully and choose the correct alternative:
Assertion (A): Price discrimination is possible under monopoly.
Reason (R): A monopolist can charge different prices in different markets because different sets of consumers - rich and poor - have different price elasticity of demand for the monopolist's product.
To which market is product differentiation relevant?
Identify the market form of the following:
Motor car market in India.
Identify the market form for the following:
Telecom industry in India.
Product differentiation is practised in monopolistic competition? Give reasons.
Give two examples of a monopolistically competitive market.
What induces new firms to enter an industry?
Name the market which has characteristics both of monopoly and perfect competition.
Identify the market form from the following:
A few large sellers
Name the characteristic which makes monopolistic competition different from perfect competition.
In which market form is there a single seller and no close substitutes for the product?
In which type of market are firms interdependent and a few large firms dominate?
