In 2 or 3 sentences, define price discrimination and give one example

Price discrimination refers to a business and marketing strategy in which a business charges customers differently based on what the business owner believes customers are willing to agree to. This is often done by dividing customers in groups that share common characteristics, and then charging a different price for the same product in each of these groups.

An example of this is the sale of airplane tickets. When tickets are in high demand, prices go up. On the other hand, if tickets are not selling well, these decrease. However, prices can also change based on a person's age, his loyalty to the airline or through the use of coupons. This means that people often end up paying very different prices for the same flight.

Price discrimination is charging a different price for the same product. The idea is this will get higher revenues from less price sensitive consumers while still reaching those who are more price sensitive. Hotels and airline tickets are a good example.