Price discrimination

Businesses often sell their products or services to different groups at different rates. Some critics say this constitutes illegal price discrimination and should be outlawed.

However, as Walter Williams points out, price discrimination is a widespread, routine business technique that benefits consumers:

  • Airlines usually charge half fare for children, even though it costs the same to fly a child across the country as an adult.

  • Amtrak charges lower fares to senior citizens than it does to younger people.

  • Movie tickets often cost less for students and senior citizens than for normal adults.

    Businesses can afford to offer these special prices because they attract more customers from the targeted groups; regulating or outlawing “discriminatory” pricing on the grounds of equal protection laws would violate their right to make a profit as they see fit, says Williams.

    Source: Walter E. Williams, Price Discrimination,, June 16, 2004.

    For text

    For more on Consumers

    FMF Policy Bulletin/22 June 2004

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