By focusing on the two intercepts — the price and quantity intercepts — of inverse linear demands, this note shows that compared to uniform pricing, third-degree price discrimination can be neutral. When all price intercepts of sub-markets' inverse demands are the same, not only will all the...

This pedagogical note discusses the differences between second and third-degree price discrimination. The comparison uses four important factors, namely, market segmentation, information about consumers, profit maximization and social welfare. The comparison shows that while market segmentation...

This paper uses a simple diagram to compare two pricing strategies: price-quantity packages, and a two-part tariff from the monopoly and from the welfare points of view. It is shown that in the two-type consumer case when the monopoly is concerned, the price-quantity packages strategy dominates...

Price discrimination generally, and third-degree price discrimination in particular, are topics taught in almost every intermediate microeconomics subject. The theory, geometry, and even the algebra behind the concept are simple, and the phenomenon commonly occurs in the sale of many of the...

This paper uses both a geometrical and mathematical analysis to explain monopolistic third-degree price discrimination, and it also shows how price discrimination affects society. A frequent policy question in the price discrimination literature is whether to allow third-degree price...