Definition
- Price discrimination
- Price discrimination is charging different customers different prices for the same product, where the gap between the prices does not come from a gap in costs.
- Not to be confused with: Product differentiation
- Product differentiation is making a product distinctive from its competitors' through its physical features, its location, intangible extras or what buyers believe about it.
Test yourself
What is the difference between price discrimination and product differentiation?
Price discrimination charges different prices for the same product; product differentiation makes the products themselves different.