1. Market price should please the seller and the buyer.

2. Some consumers will get more surplus than others.

3. Aggregate consumer surplus is all the money that buyers spend.

4. Producer surplus is the goods that producers can't sell.

5. Producer surplus exists because production costs vary.

Price discrimination

The market price for a product is like a signpost for companies. It shows them more or less what people are prepared to pay. Nevertheless, companies can set their prices just above or just below the market price if they want. They can even choose to ignore the market price completely. In the real world of business, setting prices involves skill, guesswork and risk-taking. Companies have lots of pricing tricks which help to increase profits. One of these tricks is price discrimination.

Price discrimination means charging a different price for the same product to different customers. For example, you walk into a shop and buy a CD for ?15. A few minutes later, I walk into the same shop and buy another copy of exactly the same CD. This time, the shopkeeper charges me ?20! That's price discrimination.

There are different types, or degrees, of price discrimination. First degree price discrimination is when almost every consumer pays a different price for the same product. How can this happen? Remember that the demand curve slopes downward. In theory, every consumer has their own point on the curve. In other words, each person values the product differently. You may think that an Elton John CD is worth ?20, whereas I think it's only worth 50 cents! We are on different points on the demand curve. With first degree discrimination, each consumer will pay what he or she thinks the product is worth, and sellers charge each person accordingly.

This all sounds great, but it is not usually practical in the real market place. Nevertheless, it is sometimes possible. An auction, for example, works in this way. In an auction, each consumer makes a bid for the product, and the highest bid wins. In this way, the product is sold at a price that the buyer thinks is right. Auctioning is becoming more and more common on the World Wide Web, and auctioning websites have become very big business.

Second degree price discrimination is more common than first degree discrimination. It involves changing price according to how much of the product is sold. For example, if a customer buys three pencils, they pay one euro per pencil. If they buy 300 pencils, they pay only 75 cents per pencil. This is a kind of reward for buying large amounts. This kind of discrimination is important for retailers. It allows shopkeepers to buy goods in bulk from wholesalers at lower prices. Shopkeepers then add a markup price when they sell the goods on to ordinary customers.

What about third degree price discrimination? This is when certain types of customer are charged different prices. For example, pensioners and students often get discounts on public transport or for arts events. These people cannot afford the normal market price. By offering discounts, companies widen their market share but still make a profit.

Переведите на английский язык:

1.    Рыночная цена является вознаграждением за усилия производителя.

2.    Если цена на рынке ниже, чем ожидалось, покупатель может сделать выгодное приобретение.

3.    Избыток измеряет ту полезность, которую извлекает из покупки потребитель, или ту прибыль, которую получает производитель.

4.    Разница между той ценой, которую потребители готовы заплатить, и ценой, которую они действительно платят, называется избытком потребителя, что является важным экономическим понятием.

5.    Компании используют много уловок при ценообразовании, что помогает им повышать прибыль. Цены могут быть установлены выше или ниже рыночной цены, иногда компании используют ценовую дискриминацию.

6.    Всё более популярными становятся интернет-аукционы. Участники аукциона делают ставки, и самая высокая ставка выигрывает.

Price discrimination