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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:
Pick the option which does not belong to the group.
Read the given statements carefully and select the correct option.
- The number of sellers under oligopoly are small.
- In monopolistically competitive markets, buyers and sellers have perfect knowledge about the market conditions.
Define perfect competition.
Define monopolistic competition.
Give an example of oligopoly.
Identify the market form of the following:
Goods sold are homogeneous.
Identify the market form of the following:
Market for toilet soaps in India.
State the market form of the following commodity.
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State the market form of the following commodity.
Shampoos
Identify the market form for the item given below:
A single buyer
In which form of market do producers and consumers have perfect knowledge about the market conditions?
To which market form are homogeneous products relevant?
Which market form has the least number of producers?
What is meant by barriers to entry?
There are a large number of buyers and sellers under a ______ market.
Which feature best distinguishes monopolistic competition from perfect competition?
