Various forms of Price Discrimination?

Price discrimination means charging different prices and it takes various forms according to whether the basis is customer, product, place or time. These are illustrated as under:

(a) Price discrimination on the basis of customer: In this case, the same product is charged at different prices to different customers. It is, however, potentially disruptive of customer relations.
(b) Price discrimination based on product version: In this case, a slightly different product is charged at a different price regardless of its cost-price relationship. If, for example, a table with wooden top can be sold at $400, a table with sunmica top costing $175 extra is sold at $575. The higher premium in the latter case does not necessarily reflect the higher production cost.
(c) Price discrimination based on place: An example of this method is the seats in cinema theater where the front seats are charged at lower rates than the back seats.
(d) Price discrimination based on time: An example of this method is the practice of giving off-season concession in sale of fans or refrigerators just after the summer season.

Price discrimination is possible if the following conditions are satisfied :
(a) the maker must be capable of being segmented for price discrimination;
(b) the customers should not be able to resell the product of the segment paying higher price; and
(c) the chance of competitors’ underselling in the segment of higher prices should not be possible.
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