Define Third Degree Price Discrimination and Explain the Two Necessary

question 7

Essay

Define third degree price discrimination and explain the two necessary conditions before it can be practiced? Does this practice fit any one mode more than any other?

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Definitions:

Real Wages

Wages adjusted for inflation, giving a true measure of the purchasing power of earned income over time.

Hourly Wage

The amount of money paid to an employee for every hour worked.

Fringe Benefits

Nonwage compensation, mainly medical insurance, that workers receive from employers.

Demand for Labor

The total amount of labor that employers are willing and able to hire at a given wage rate in a certain period.