Price discrimination refers to the practice of charging different prices for the same product or service to different customers. The main purpose of price discrimination is to increase revenue by charging customers the highest price they are willing to pay.

There are three types of price discrimination:

1. First-degree price discrimination: This is also known as perfect price discrimination. In this type of price discrimination, the seller charges each customer a different price based on their willingness to pay. This means that the seller can extract the maximum possible revenue from each customer.

2. Second-degree price discrimination: In this type of price discrimination, the seller charges different prices based on the quantity purchased. For example, a seller may offer discounts for bulk purchases.

3. Third-degree price discrimination: In this type of price discrimination, the seller charges different prices to different groups of customers. For example, a seller may offer discounts to students or senior citizens.

Price discrimination can be beneficial for both the seller and the customers. The seller can increase revenue by charging different prices to different customers, while customers can benefit from lower prices based on their willingness to pay or their membership in a particular group. However, price discrimination can also be seen as unfair or discriminatory, especially if it is based on factors such as race or gender.