third-degree price discrimination

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Price discrimination where sellers can identify different types of customer, and offer each type a different contract. Special prices may be offered, for example, to students or pensioners. This type of discrimination is possible only when the resale of goods or services is costly or impossible; if resale were costless, every customer would buy through the type that offered the lowest price. See also first-degree price discrimination; second-degree price discrimination.

Subjects: Economics.

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