This editable and downloadable PowerPoint covers Price Discrimination which is most likely to happen in imperfectly competitive markets and especially monopoly. If you have ever bought a student cinema ticket, booked an off-peak train, or signed up for a discounted broadband package, you have participated in price discrimination. In imperfectly competitive markets, firms rarely charge a single uniform price to every consumer. Instead, they utilize price discrimination, which involves selling essentially the same product at different prices to different groups of consumers. Crucially, this pricing strategy is qualitatively different from product differentiation; the price variation is not driven by differences in the cost of production.

Price discrimination is when a firm charges different prices to different customers for the same good or service. The firm will usually charge customers with different price sensitivities different amounts - customers who are less price-sensitive will be charged a higher price, while those who are more price-sensitive will be charged less. The goal of price discrimination is to maximize profits by extracting the most value from each customer. A common example is airline tickets, where business travelers might pay a higher price for tickets than leisure travelers. Another example is coupons - they're a way to offer discounts to price-sensitive customers while charging the full price to others.