1. Price Discrimination Price discrimination is a pricing strategy in which the supplier of goods or services charges a different price to different groups of people for the same goods and services. The main purpose of price discrimination is to capture consumer surplus in the market and obtain maximum profit. There are three types of price discrimination: • First degree price discrimination • Second degree price discrimination • Third degree price discrimination First degree discrimination is also known as perfect price discrimination. It occurs when the company charges a different price for each unit consumed. It is the maximum possible price that an individual is willing to pay for a product. Therefore, the company gets all the consumer surplus and earns the highest profits. Under conditions of second-degree price discrimination, companies cannot distinguish between different consumers. This type of discrimination means charging different prices depending on the quantity consumed. With this strategy the producer is able to earn part of the consumer surplus without needing to know each individual customer, because a consumer buys the quantity he wants, at the established price and therefore differentiates himself. Such price discrimination usually occurs in large consumer bulk purchases and quantity discounts (the more you buy, the more you save). Third-degree price discrimination, in turn, occurs when the company charges different prices for different groups of consumers. Here the company must be able to predict the elasticity of demand for a particular product and set reasonable prices that everyone can afford. This price discrimination can be observed in the film industry. Students, for example, usually get a discount for a cinema... by paper... by marketing and booking systems. CCs also often refer to the business models of low-cost airlines, such as meals not included and baggage charges. This can save you money and generate more profits. The airline industry can be defined as a network industry because it has a strong system of routes and airports. It is extremely difficult to compete in such a complicated industry, so they compete on a large number of issues. They have both price and non-price competition. Non-price competition includes flight frequency, in-flight services and loyalty programmes. And, very common in the airline industry, price discrimination is one of the issues related to competition in the airline industry. Price discrimination in the airline industry will be the subject of further discussion.3. Price discrimination in the airline industry.