Price Discrimination

Suppliers or intemediaries charging different prices for the same goods and services are engaging in price discrimination. It occurs when suppliers offer bulk discounts or money off beyond a minimum level of consumption such as ‘three for the price of two’, for example. This incentivises bulk buying behaviour to drive up sales and reduces surplus supply. Price discrimination is also seen in discounted consumption for minors or the elderly. Price discrimination is more typically seen in economies with imperfect competition, which offers more latitude.