Answer:Second-degree price discrimination occurs when a seller charges a different price for different quantities consumed. Examples of this are loyalty cards rewards or discounts for consumers, so that they can purchase more.As figure 2 illustrates, firms initially put the price of a particular good or service at P1. The discounted price is P2. Consumers benefit from the lower price and that increases their consumer surplus and firms also benefit from the extra revenue.Third-degree price discrimination occurs when a seller charges a different price to different customer groups. A classic example is some cinemas that often have different prices for children, students, adults, and the elderly.
Figure 3 illustrates third-degree price discrimination. The whole market is split into two categories: elastic and inelastic consumers. Firms charge elastic consumers the lowest price. For example, cinemas charge students a lower price since they have less disposable income and are more sensitive to price changes. Inelastic consumers are charged the highest price. In our cinema example, adults tend to be charged the highest price as they have more disposable income and are less sensitive to price changes compared to other groups.
Explanation:How far the travel date is: a ticket that is bought in advance is usually cheaper compared to a ticket bought at the last minute.
Travel peak times: travelling during the weekends tends to be more expensive than travelling during weekdays. Travelling during the summer or Easter holidays also tends to be more expensive.
Unsocial hours: travelling during the early mornings and late nights is cheaper, as fewer people tend to travel at those times.
Extras: customers usually have to pay more for seats (in the same class) with more legroom to for check-in luggage.