Perfect Price Discrimination

… a core term used in Economic Analysis and Atlas102

Definition

Tyler Cowen (reference below) defines perfect price discrimination as market segmentation so that each person is charged their maximum willingness to pay.

Cowen notes that under perfect price discrimination:

  • Consumers end up with zero consumer surplus
  • All the gains from trade go to the monopolist
  • Perfect price discrimination is efficient in that there is no deadweight loss
Atlas topic, subject, and course

Monopoly and Price Discrimination (core topic) in Economic Analysis and Atlas102 Economic Analysis.

Source

Tyler Cowen, Minute 4:03 of the 8-minute video, The Social Welfare of Price Discrimination, Principles of Economics – Microeconomics, Marginal Revolution University, at http://www.mruniversity.com/courses/principles-economics-microeconomics/price-discrimination-social-welfare, accessed 8 May 2016.

Page created by: Ian Clark, last modified 8 May 2016.