Public Policy and Business
Price discrimination is the practice of charging different prices to different consumers for the same good or service, based on their willingness to pay. This strategy allows firms to maximize profits by capturing consumer surplus, which is the difference between what consumers are willing to pay and what they actually pay. Price discrimination is often associated with monopolies and oligopolies, where firms have the market power to set prices above marginal cost and can segment the market based on various factors like time, quantity, or consumer characteristics.
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