what do you mean by third degree price discrimination ? when it is profitable for monopolist discriminate and how will he allocate his output into two market and charge different prices
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Discriminating monopoly’ or ‘price discrimination’ occurs when a monopolist charges the same buyer different prices for the different units of a commodity, even though these units are in fact homogeneous. Such a situation is described as “perfectly discriminating monopoly”. It is more usual, however, to find that a monopolist sells identical products to different buyers at different prices.
Discrimination between buyers is more usual than discrimination between units of a homogeneous commodity. In general, it can be said that price discrimination occurs when a producer sells a commodity to different buyers at two or more different prices for reasons not associated with differences in costs. It may be either systematic (i.e., discrimination systematically and persistently) or unsystematic (i.e., discrimination frequently or casually).
In the simplest case, there is one identical good going to two buyers (or groups of buyers).
Discrimination between buyers is more usual than discrimination between units of a homogeneous commodity. In general, it can be said that price discrimination occurs when a producer sells a commodity to different buyers at two or more different prices for reasons not associated with differences in costs. It may be either systematic (i.e., discrimination systematically and persistently) or unsystematic (i.e., discrimination frequently or casually).
In the simplest case, there is one identical good going to two buyers (or groups of buyers).
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