Price Discrimination
Economics ⇒ Markets and Price Determination
Price Discrimination starts at 12 and continues till grade 12.
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A monopolist faces two markets: Market A with elastic demand and Market B with inelastic demand. In which market will the monopolist charge a higher price?
A railway company charges lower fares for students and higher fares for adults. What type of price discrimination is this?
Describe one way in which technology has made price discrimination easier for firms.
Describe the welfare effects of first-degree price discrimination.
A cinema charges Rs. 200 for adults and Rs. 120 for children for the same movie. Is this price discrimination? Yes or No.
A company offers a product at Rs. 500 for regular customers and Rs. 400 for students. If 100 regular customers and 50 students buy the product, what is the total revenue?
A monopolist faces two markets: Market A with elastic demand and Market B with inelastic demand. In which market will the monopolist charge a higher price?
A monopolist sells 10 units at Rs. 100 each to one group and 20 units at Rs. 80 each to another group. Calculate the total revenue from both groups.
Which of the following is a benefit of price discrimination to consumers? (1) All consumers pay more (2) Some consumers get access to goods at lower prices (3) It reduces output (4) It increases deadweight loss
Which of the following is a disadvantage of price discrimination? (1) It may be seen as unfair (2) It always increases consumer surplus (3) It reduces producer surplus (4) It leads to perfect competition
Which of the following is a necessary condition for price discrimination? (1) Homogeneous product (2) Perfect competition (3) Different price elasticities in different markets (4) Free entry and exit
Which of the following is a real-world example of price discrimination in India? (1) Uniform GST rates (2) Indian Railways charging different fares for AC and sleeper class (3) MRP printed on all products (4) Price controls on medicines
Fill in the blank: In first-degree price discrimination, the producer captures all of the ________ surplus.
Fill in the blank: In second-degree price discrimination, prices vary according to the ________ purchased.
Fill in the blank: In third-degree price discrimination, the market is divided into ________ based on elasticity of demand.
Fill in the blank: Price discrimination is more likely to be successful when demand elasticity differs ________ markets.
A cinema charges Rs. 200 for adults and Rs. 120 for children for the same movie. Is this price discrimination? Yes or No.
True or False: Price discrimination always leads to a loss of social welfare.
True or False: Price discrimination can be used to increase access to essential goods for low-income groups.
True or False: Price discrimination can help increase output compared to single-price monopoly.
