<p>In 2nd degree price discrimination, the producer only knows that there are different consumer groups who have different demand curves. He thus adjusts the quantity/quality of the product in a way that the consumers will self-select into the according quantity/quality-price combination that maximises the firms profit.</p>
<p>Now, I do not understand how the price is being determined.</p>
<p>Specifically, Varian in Intermediary Microeconomics with Calculus (Figure 26.3) writes that consumers will for quantity/quality x01 pay price A which is the area below the demand curve.</p>
<p><a href="https://i.sstatic.net/kKYzj.png" rel="nofollow noreferrer"><img src="https://i.sstatic.net/kKYzj.png" alt="" /></a></p>
<p>Can someone please explain to me how this area below the demand curve can be understood as the price.</p>
<p>Many Thanks!</p>

<microeconomics><monopoly><price-discrimination>
Price in Second-degree Price Discrimination
Marta
# Price in Second-degree Price Discrimination

(Asked by: username_0 on 2021-08-22)

In 2nd degree price discrimination, the producer only knows that there are different consumer groups who have different demand curves. He thus adjusts the quantity/quality of the product in a way that the consumers will self-select into the according quantity/quality-price combination that maximises the firms profit.

Now, I do not understand how the price is being determined.

Specifically, Varian in Intermediary Microeconomics with Calculus (Figure 26.3) writes that consumers will for quantity/quality x01 pay price A which is the area below the demand curve.

[![](https://i.sstatic.net/kKYzj.png)](https://i.sstatic.net/kKYzj.png)

Can someone please explain to me how this area below the demand curve can be understood as the price.

Many Thanks!

**Tags:** microeconomics, monopoly, price-discrimination


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## 0 answers

