ales. Profit maximization is achieved neither where the number of products sold is the highest, nor where the price is the highest.
             Price discrimination is only profitable if and when the given target groups' price elasticity of demand differs to the point where the separate prices yield to profit maximization for each given group in question (where marginal revenue equals marginal cost). Groups that are more sensitive to prices, students and senior citizens for example, have a lower price elasticity of demand and are thus the ones that are often charges the lower prices for the identical goods or services.
             The key to price discrimination and utilizing it to fully compliment other economic practices, ultimately achieving the total profit maximization, is the ability to effectively and efficiently collect, analyze, and act upon data gathered about the different groups. First of all, the groups must be accurately identified and the differences between groups must be discerned ahead of time. Children, genders, and senior citizens are easily singled-out by appearance, while military personnel, college students, and other groups must carry some sort of identification. Firms typically will advertise the highest prices in publications, and then offer discounts to qualified groups.
             The three basic conditions for price discrimination to be effective are as follows:
             1) Consumers can be divided into and identified as groups with different elasticities of demand.
             2) The firm can easily and accurately identify each customer.
             3) There is not a significant resale market for the good in question.
             The premise behind the practice of first degree price discrimination is that the firm has enough accurate information about the end consumer that products can be sold each time for the maximum amount that the consumer is willing to pay. The two most prevalent examples of first-degree price discrimination are called "price ...