Munich Personal RePEc Archive

Market Interdependence and Third-Degree Price Discrimination: Comment

Cebula, Richard (1979): Market Interdependence and Third-Degree Price Discrimination: Comment. Published in: The Quaterly Review of Economics and Business , Vol. 20, No. 2 (31. August 1980): pp. 106-109.

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Abstract

The purpose of this theoretical note is to develop a model of third-degree price discrimination in which the quantities sold in each market are interdependent. We demonstrate in our mathematical model that in this situation the price differential may be explained not only in terms of price elasticity differentials, as is typically shown to be the case, but also in terms of the market interdependency, which is generally overlooked.

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