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Question
With the help of an example explain the meaning of price discrimination.
Solution
The act of selling the same product at different prices to different buyers is known as price discrimination. A monopolist can charge different prices from his different buyers easily. If a monopolist adopts a policy of price discrimination, the situation is called a discriminating monopoly.
Example:
- Indian Railways charge lower fares from senior citizens of the country as compared to other citizens.
- Electricity boards sell electricity at cheaper rates for agricultural use than for domestic use.
RELATED QUESTIONS
Non-price competition is ______.
“While shopping for fruits in the local market you see many seller selling fruits”. In this context answer the following:
- What is the type of market referred to?
- State and draw the type of demand curve faced by the market above.
- Differentiate between the market indicated above and monopoly on the basis of:
- No. of sellers
- Market price
- Entry and exit of firms in the market
'A few big sellers' is a characteristic of ______.
Match the following and select the correct option:
| Column I | Column II | ||
| (i) | Perfect competition | (A) | Differentiated Products |
| (ii) | Monopoly | (B) | Few large firms |
| (iii) | Monopolistic Competition | (C) | Single seller |
| (iv) | Oligopoly | (D) | Homogeneous products |
Indian Oil Corporation Limited is an example of a/an ______.
"The price of a product under perfect competition is determined by an individual seller."
Which of these feature's is found in both a perfectly competitive market and a monopolistically competitive market?
Read the given statements carefully and select the correct option.
- The number of sellers under oligopoly are small.
- In monopolistically competitive markets, buyers and sellers have perfect knowledge about the market conditions.
Read the following statements carefully and choose the correct alternative:
Assertion (A): Buyers are ready to pay different prices for the product produced by different firms under perfect competition.
Reason (R): The products offered for sale in the perfect market are homogeneous.
Read the following statements carefully and choose the correct alternative:
Assertion (A): Under Perfect Competition, each firm faces a perfectly elastic demand curve.
Reason (R): Firm is a price maker under perfect competition.
Producers in a monopoly are price makers. Briefly explain.
Give three points of difference between perfect competition and monopoly.
What is meant by oligopoly?
Identify the market form of the following:
Goods sold are homogeneous.
Name the market in which there is a single buyer and many sellers.
Define monopoly.
Why can a monopolist charge different prices in different markets?
Mention one feature of a monopoly market.
