ABSTRACT
This chapter focuses on output and price under each type of price discrimination and pay close attention to the welfare implications of each type of discrimination. Price discrimination occurs whenever the difference in prices between consumers is not proportional to the difference in costs. Walt Disney also uses various methods of second-degree price discrimination by offering both Florida residents and nonresidents many different types of passes. Robinson-Patman Act cases are grouped into either primary-line or secondary-line cases according to their effects on competition. The act requires only that there may be a substantial lessening of competition. The chapter also focuses on Illegally Induced Price Discrimination. The Robinson-Patman Act was passed in large part to prevent major chain stores with monopsony power from inducing lower prices from suppliers. Criticism of the Robinson-Patman Act by economists and judges has had a major impact on enforcement, greatly reducing the number of cases filed by the Federal Trade Commission Act (FTC).
