Does Price Discrimination exist in the real world? Discuss with reference to any particular product or service? 

Price discrimination or yield management occurs when a firm charges a different price to different groups of consumers for an identical good or service, for reasons not associated with costs.
It is important to stress that charging different prices for similar goods is not pure price discrimination.
We must be careful to distinguish between price discrimination and product differentiation – differentiation of the product gives the supplier greater control over price and the potential to charge consumers a premium price because of actual or perceived differences in the quality / performance of a good or service.

Conditions necessary for price discrimination to work
Essentially there are two main conditions required for discriminatory pricing
1 Differences in price elasticity of demand between markets: There must be a different price elasticity of demand from each group of consumers. The firm is then able to charge a higher price to the group with a more price inelastic demand and a relatively lower price to the group with a more elastic demand. By adopting such a strategy, the firm can increase its total revenue and profits (i.e. achieve a higher level of producer surplus). To profit maximise, the firm will seek to set marginal revenue _______ _______ _________ ____ _______ _____ ____ ______ _________.
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