The Price Discrimination concept

Price discrimination occurs when a seller charges different prices to different customers for the same product or service, based on factors like willingness to pay, location, or purchase quantity. The goal is to maximize revenue by capturing consumer surplus—extra value customers are willing to pay—and reallocating it to the seller. It’s common in industries like airlines, where ticket prices vary depending on booking time or customer profile, or discounts for students. While it can benefit businesses financially, it also raises ethical considerations regarding fairness and consumer treatment.