Second-degree price discrimination occurs when a seller charges different prices based on the quantity consumed or the version of the product purchased, rather than the characteristics of the buyer. This strategy allows firms to capture consumer surplus by offering a range of prices and products, such as bulk discounts or premium versions, which appeal to different consumer preferences and willingness to pay. It's particularly relevant in markets with varying demand and can be utilized by monopolists and firms in oligopoly and monopolistic competition to maximize profits.
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