3rd Degree Price Discrimination

 

3rd Degree Price Discrimination, is based around the idea that the firm sets prices that will provide accommodations to the consumers. The firms know broad demographics about the particular types of consumers they will supply, and charge prices such that everyone will be able to consume the product. In order for this form of discrimination to work the firm must be able to predict the elasticity of demand in various consumers. The monopoly charges different prices to different consumer groups who have different demand curves. The monopolist can separate the markets, uses (e.g. age, profession, location) in order to set different prices?

 

Are there ways to get the consumer to self-identify the price elasticity of demand when it comes to 3rd degree price discrimination?
Identify different items that would fall under or represent 3rd degree price discrimination.

 

 

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