The Theory of Price Discrimination (Edmund W. Schlenk)

Certainly! The Theory of Price Discrimination, as articulated by Edmund W. Schlenk, explains how a seller charges different prices to different customers for the same product, based on their willingness or ability to pay. This strategy maximizes the seller’s profit by capturing additional consumer surplus—extra value consumers place on a product beyond its cost. Effective price discrimination depends on the seller’s ability to segment markets, prevent resale, and identify customer groups. It benefits firms through increased revenue, and can sometimes lead to more efficient outcomes, though it raises important considerations about fairness and market power.