Price discrimination lowers social welfare in markets with specific demand functions.
The article explores how setting different prices for different groups of customers can affect overall welfare. It looks at situations where demand in one market is related to demand in another market, and both markets have the same prices. The study finds that when demand behaves in certain ways, like being more sensitive to price changes or becoming more inelastic as prices rise, this type of price discrimination can actually reduce social welfare. This is especially true for markets with imperfect competition.