Discriminating Monopoly

Discriminating Monopoly is a situation where a monopolist charges different prices for the same commodity from different groups of consumers, for different uses, and at different places.

Different Prices for Different Groups of Consumers

In this situation, the monopolist charges different prices from different groups of consumers. For example, a hotel charges different prices for rooms from domestic and international tourists.

Different Prices for Different Uses

In this situation, the monopolist charges different prices for the same commodity for different uses. For example, a pharmaceutical company charges different prices for the same drug for human and animal use.

Different Prices at Different Places

In this situation, the monopolist charges different prices for the same commodity at different places. For example, an airline charges different prices for the same flight from different destinations.

Advantages of Discriminating Monopoly

- Increases profit for the monopolist
- Allows the monopolist to capture different segments of the market
- Enables the monopolist to charge higher prices from those who are willing and able to pay more
- Allows the monopolist to engage in price discrimination and reduce the competition

Disadvantages of Discriminating Monopoly

- Creates inequality and unfairness among consumers
- Discrimination can lead to resentment and dissatisfaction among consumers
- Reduces consumer welfare
- Can lead to a loss of market share and revenue for the monopolist if consumers find alternative products or substitute goods

Conclusion

Discriminating Monopoly is a situation where a monopolist charges different prices for the same commodity from different groups of consumers, for different uses, and at different places. It has its advantages and disadvantages, and its impact on the market depends on various factors such as the nature of the commodity, the availability of substitute goods, and the elasticity of demand.