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Price discrimination is the practice of charging different prices from different consumers for the same commodity in the market. The difference in price charged will be based on various factors such as sex, age, race or caste, etc. This type of practice of charging the price is known as price discrimination. There are mainly three different types of price discrimination and they are the first-degree price discrimination, second-degree price discrimination, and third-degree price discrimination. Under the first degree, the firm or the seller will charge the maximum possible price for each unit sold to the consumer. Thus, there will be no consumer surplus under first-degree price discrimination. Under the second degree, there will be discounts provided for those who purchase in bulk quantities, and under the third degree, there will be different prices for different consumers.
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