LECTURE #24

TOPIC
PRICE
DISCRIMINATION
Price discrimination
 Price Discrimination is
merely a technical term
meaning differentiation in
price to increase efficiency.
Types of price discrimination
• By Customer

• According to Quantity Sold

• Price Varies by Location

• Price Varies over Time

• Bulk Discounts

• Incentive Discounts

• Seasonal discounts
Modern Taxonomy
Complete discrimination
Direct segmentation
Indirect segmentation
 The hierarchy --
complete/direct/indirect -- is
in decreasing order of

• Profitability and

• Information requirement.
Sales revenue without and with Price
Discrimination
Multiple
Multiple Market
Market Price
Price Determination
Determination
Examples of Price
Discrimination
Travel industry
Retail Incentives
Incentives for Industrial
Buyers
Universal pricing