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With the exception of perfect competition, all market structures have the possibility for pricing discrimination. Whenever a company encounters a downward-sloping demand curve.

What is price discrimination?

When the same provider sells the same or substantially equivalent items or services in different marketplaces at different prices, this is known as price discrimination in microeconomics. The ability to differentiate prices mostly depends on the variability of customers' willingness to pay and the elasticity of their demand. A company needs to have market power—such as a dominant market share, a distinctive product, exclusive pricing authority, etc.—for price discrimination to be successful. All prices that are subject to price discrimination are higher than the equilibrium price in a market with perfect competition. However, certain prices subject to price discrimination may be less than those set by monopolists who charge a single price.

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