A cinema hall charges ₹100 for students, ₹250 for

Solution

Third-Degree Price Discrimination (also known as Group Pricing) occurs when a monopolist identifies distinct groups of consumers with differing price elasticities of demand and charges them different prices for the exact same product. The goal is to maximize profit by extracting more revenue from the "inelastic" group (those less sensitive to price, like working professionals) while still attracting the "elastic" group (those more sensitive to price, like students). Other examples may include happy hour’s in restaurants, usually earlier on in evening when demand is lower.   Other Types of Price Discrimination ·        First Degree Price Discrimination – also k nown as Perfect Price Discrimination, the seller charges every single customer their maximum willingness to pay, leaving zero consumer surplus. ·        Second Degree Price Discrimination- This involves volume-based pricing. The price varies based on the quantity consumed (e.g., bulk discounts) rather than the specific segment of the consumer. Other examples include Loyalty cards reward frequent buyers with discounts on future products. Note – Block pricing is a strategy where a company sets different prices for different quantities or package of a product or service. The primary goal is to encourage bulk purchases by offering a lower unit price as the quantity increases. Block pricing is a primary method of implementing second-degree price discrimination.   Price skimming is a strategy where a company sets a high initial price for a new, innovative, or highly desirable product and then gradually lowers it over time. This technique "skims" layers of consumers who are willing to pay a premium (early adopters) before targeting more price-sensitive customers late.