MODULE 63

Price Discrimination

In this Module, you will learn to:

• Explain the meaning of price discrimination

• Discuss why price discrimination is common when producers have market power

Up to this point, we have considered only the case of a monopolist who charges all consumers the same price. However, monopolists want to maximize their profit and often they do so by charging different prices for the same product. In this module we look at how monopolists increase their profit by engaging in price discrimination.