Monty Python and Price Discrimination
This video clip from the movie, Monty Python's Life of Brian, can be used to teach price discrimination in the first degree. When a man tries to purchase an item from a merchant at the market, the merchant refuses to let him pay the price of the item, insisting that he barter for it. By altering his prices based on his customer's willingness to pay and forcing him to barter, the merchant is price discriminating in the first degree.
- How does price discrimination allow a firm to maximize profits?
- What happens to deadweight loss when price discrimination is implicated?
- What are different strategies that firms use when price discriminating?