Question

Price discrimination is possible under monopoly. Explain.

Answer 1

Price discrimination is possible under Monopoly because:
(a) Monopoly is a market situation where there is only one seller who has complete control over the supply of commodity.
(b) So he is the price maker and also there is no close substitute for his product.
(c) Therefore, the buyer has no alternative but to buy the product from the monopolist or go without it.
(d) So a monopolist can charge different prices from different buyers for the same product.
(e) Generally he charges higher price from rich and lower price from poor.
(f) E.g. a doctor in a village may charge less fees from poor and high fees from rich.