Price Discrimination

A pricing strategy that charges customers different prices for the same product or service. In pure price discrimination, the seller will charge each customer the maximum price that he or she is willing to pay. In more common forms of price discrimination, the seller places customers in groups based on certain attributes and charges each group a different price.

Price discrimination allows a company to earn higher profits than standard pricing because it allows firms to capture every last dollar of revenue available from each of its customers. While perfect price discrimination is illegal, when the optimal price is set for every customer, imperfect price discrimination exists. For example, movie theaters usually charge three different prices for a show. The prices target various age groups, including youth, adults and seniors. The prices fluctuate with the expected income of each age bracket, with the highest charge going to the adult population.


Investment dictionary. . 2012.

Look at other dictionaries:

  • Price discrimination — or price differentiation[1] exists when sales of identical goods or services are transacted at different prices from the same provider.[2] In a theoretical market with perfect information, perfect substitutes, and no transaction costs or… …   Wikipedia

  • price discrimination — ➔ discrimination * * * price discrimination UK US noun [U] ► ECONOMICS, COMMERCE, MARKETING the act of selling the same product to different groups of customers at different prices: »Offering a student discount is a form of price discrimination …   Financial and business terms

  • price discrimination — n. Asking different prices from different buyers for the same item. The Essential Law Dictionary. Sphinx Publishing, An imprint of Sourcebooks, Inc. Amy Hackney Blackwell. 2008. price discrimination n …   Law dictionary

  • price discrimination — the practice of offering identical goods to different buyers at different prices, when the goods cost the same. [1955 60] * * * Practice of selling goods or services at different prices to different buyers, even though sales costs are the same… …   Universalium

  • price discrimination — Charging one customer more than another for the same article or service. Accepting the doctrine that it is unlawful for anyone engaged in interstate commerce to discriminate in price between customers, we would accept the further doctrine that… …   Ballentine's law dictionary

  • price discrimination — The sale of the same product at different prices to different buyers. Usually practised by monopolists, it requires that a market can be subdivided to exploit different sets of consumers and that these divisions can be sustained. Pure price… …   Big dictionary of business and management

  • price discrimination — A sales *pricing policy in which different prices are established for different buyers. Price discrimination is only possible in a *market that can be segmented in some manner. For example, a transport business may set different prices at… …   Auditor's dictionary

  • price discrimination — / praɪs dɪskrɪmɪˌneɪʃ(ə)n/ noun the practice of charging different prices in different markets or to different types of customer ● Price discrimination has caused some ill feeling among customers …   Marketing dictionary in english

  • price discrimination — noun 1. : the offering of similar or identical goods at different prices to different buyers 2. : the setting of a price differential on similar goods that is not based on differences in the cost of production …   Useful english dictionary

  • price discrimination — UK / US noun [uncountable] business the practice of charging different prices for the same product or service in different markets …   English dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.