Price discrimination is a pricing strategy where a seller charges different prices for the same product or service to different customers. This practice is often based on factors such as customer demographics, purchase timing, or quantity bought. The goal is to maximize profits by capturing consumer surplus, which is the difference between what consumers are willing to pay and what they actually pay. There are several types of price discrimination, including first-degree (charging each customer the maximum they are willing to pay), second-degree (offering discounts based on quantity purchased), and third-degree (charging different prices to different groups, like students or seniors). This strategy can benefit both sellers and consumers when managed effectively.