| Lesson Plan |
| Grade: |
Date: 25/02/2026 |
| Subject: Economics |
| Lesson Topic: price discrimination – first, second and third degree: conditions for effective price discrimination |
Learning Objective/s:
- Describe the three degrees of price discrimination and give real‑world examples.
- Explain the conditions required for effective price discrimination.
- Apply the profit‑maximisation formula to determine optimal prices for different market segments.
- Compare the practicality of each degree and evaluate case‑study scenarios.
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Materials Needed:
- Projector or interactive whiteboard
- Slide deck with demand and MR diagrams
- Handout summarising the three degrees and conditions
- Calculator or spreadsheet for price calculations
- Sample case studies (airline fares, student discounts, bulk pricing)
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Introduction:
Begin with a quick poll: “Would you pay more for a concert ticket if you could guarantee a seat?” This taps into students’ personal experience of willingness to pay and leads into price discrimination. Review the concept of consumer surplus from the previous lesson. Today students will identify the three degrees of price discrimination and the conditions that allow firms to implement them.
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Lesson Structure:
- Do‑now (5’) – Students answer the poll on sticky notes; teacher collects responses.
- Mini‑lecture (15’) – Define price discrimination and outline first, second, and third degree with examples using slides.
- Group activity (15’) – Teams analyse a case study (e.g., airline pricing) and classify which degree it illustrates, noting required conditions.
- Whole‑class debrief (10’) – Groups present findings; teacher highlights key conditions and corrects misconceptions.
- Calculation practice (10’) – Using P = MC / (1 + 1/ε), students compute optimal prices for two market segments.
- Quick check (5’) – Exit ticket: list the three conditions that must hold for third‑degree discrimination.
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Conclusion:
Summarise how market power, segmentation ability and preventing arbitrage enable firms to capture consumer surplus. Students complete an exit ticket naming one real‑world example of each degree. For homework, they research a local business that uses price discrimination and prepare a brief summary.
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