February 2016
Beginner to intermediate
500 pages
33h 40m
English
We start by studying the most common form of nonuniform pricing, price discrimination, where a firm charges various consumers different prices for a good.2
For almost any good or service, some consumers are willing to pay more than others. A firm that sets a single price faces a trade-off between charging consumers with a high willingness to pay a high price and charging a low enough price to sell to other customers with a lower willingness to pay. As a result, a single-price firm sets an intermediate price. By price discriminating, ...