Third-degree price discrimination

Third-degree price discrimination occurs when a company charges different prices to different groups of consumers for the same product or service, based on their willingness to pay. This can happen for various reasons, such as age, location, or usage patterns. For example, cinemas often charge lower prices for students and seniors compared to regular adults. By segmenting the market and setting prices accordingly, businesses can maximize their revenue while making their products more accessible to different groups. This strategy relies on the ability to identify and target these distinct consumer segments effectively.