what is price discrimination causes-objective and it's type

What is price discrimination causes- objective and it's types. 

Price discrimination

Price discrimination is a difference in price among the consumers for the same product. The company or producer or seller often fixes a single price of the product and sales the product in the fixed price. But sometime there are the circumstances in which producer charges different prices from different consumers for the same product seller aur producer sales his product with additional charges to some consumers in higher price and sales to another consumer in lower prices then. This different type of price for the same product situation is called price discrimination. 

Ex. Railway sales its ticket in the different prices for same coach according to the cota to the consumers.

Causes and objective of price discrimination :- the main objective of price discrimination of seller that he want to sell its product more than more and earn maximum profit. However some of the causes and objective are given below -

1. To introduce the new product in the market

2. To create aur reduce competition from the competitor in the market. 

3. To this courage new companies from entering into particular industry or market. 

4. To charge according to the utility of product by the consumer. 

5. To charge according to consumers paying capacity. 

Types of price discrimination

1.Individual price discrimination :- in the individual price discrimination the price is made on individual basis in which some customers are charged higher price and other customers are charge lower price. 

Ex. The same product sale to the relative in lower price but the product sales and higher price to other. 

2.Geographical price discrimination :- when the price of the product is according to geographical condition then it is called geographical price discrimination. 

Ex. The product sales in lower price to nearest people and the same product sales higher price which relate so far from the production area. 

3.Group price discrimination  :- in the type of group price discrimination the same product sales according to the group which is made by them. 

4.Price discrimination on the basis of use :- when the same product provided by the seller or producer on the basis of its use then it is called price discrimination on the basis of use. 

Ex. Electricity charges are higher to the commercial users then the domestic users. 

5.Price discrimination on the basis of time :- when seller discriminise the price of the product according to the time it is called price discrimination on the basis of time. 

Ex movie tickets are sold in lower price in in the morning so but at the evening so it is higher. 

6.Price discrimination by offering discount :- sometime producers or sailors sales their product by offering discount to some of the customer or some of time period when Prise discrimination is according to offering discount then it is called Pride discrimination by offering discount. 

7.Price discrimination on the basis of facilities:- when price discrimination is made according to facilities which is provided by the producer of seller to the consumer is called price discrimination on the basis of facilities. 

Ex. Airline industry decide there ticket price according to the given facilities where business class prices are higher than the economic class.