How is price discrimination defined?

Price discrimination is defined as the practice of selling a product at different prices to different consumers or entities without a justifiable reason for those price differences. This practice allows sellers to maximize their revenue by charging customers based on their willingness to pay rather than a uniform price for the product. It can occur in various forms, such as charging different prices based on customer demographics, purchasing behaviors, or payment methods.

To elaborate, price discrimination usually involves settings where different groups of consumers are able to be identified and are willing to pay different amounts. For example, a movie theater might charge lower prices for students or seniors compared to regular adults, which is a form of price discrimination aimed at maximizing ticket sales across different consumer segments.

This definition clarifies why the correct answer focuses specifically on the practice of varying prices without justified reasoning, as opposed to the other options which don't accurately capture the essence of price discrimination.