The model characterized the interdependence firms

Microeconomics Models

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Price discrimination is a microeconomic model that involves charging a different price to different groups of people for the same good. The model has two forms, first, charging consumers the maximum amount that they are willing to pay in the First Degree Price Discrimination meaning there will be no consumer surplus. Also, the Second Degree Price Discrimination where different prices are charged depending upon the choices of consumer such as collecting coupons, period and quantity. Monopoly refers to a model that is defined as a single seller of a product. In this structure, a firm enjoys a market share of 100 per cent.

Oligopoly is another model which refers to an industry dominated by a few large firms. Oligopoly, which is the most common market structure, the model is characterized by the interdependence of firms. Other characteristics include barriers to entry which enable firms to gain a significant market share as well as differentiated products since firms often compete on non-price competition.