Why can a monopolist charge different prices in different markets?
Answers
Answer:
The monopolist often charges different prices from different consumers for the same product. This practice of charging different prices for identical product is called price discrimination.
According to Robinson, “Price discrimination is charging different prices for the same product or same price for the differentiated product.”
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According to Stigler, “Price discrimination is the sale of various products at prices which are not proportional to their marginal costs.”
In the words of Dooley, “Discriminatory monopoly means charging different rates from different customers for the same good or service.”
According to J.S. Bains, “Price discrimination refers strictly to the practice by a seller to charging different prices from different buyers for the same good.”
Let us learn different types of price discrimination.
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Explanation: