Price Discrimination

This assessment requires you to explore a real world-application of an example of asymmetric information.

Your answer must be no more than four hundred words (12- point font, double spaced, not including any diagram or references).


The question

  1. Define the three types of price discrimination, clearly stating the  different information requires of each type of discrimination.
  2. Find a real- world example of second- degree price discrimination. Describe the important aspects of you example in detail and analyse it using economic theory. In particular, how does the producer discriminate between the types of consumers? That is, how does the producer get the consumers to reveal their private information ( their type)?
  3. What are the welfare implications of the discrimination in your example? Is there a potential role for government to regulate the practice?

Please note that you must:

  1. select a real example.
  2. Describe the key details in the example you are analyzing.
  3. Apply the theories from the unit of study and from your own reading to the real-world example.
  4. You are expected to undertake some research in completing this assignment, however the bulk of your essay should focus on analysis (see point 5)
  5. In this assignment, you will also be rewarded for the depth of your analysis using the tools that you will have been taught in the course.
  6. Reference your work. Any standard reference style is fine, provided your referencing is complete, consistent and correct.