Money as a Medium Exchange Barter Trading is too Clumsy Large-Scale Production requires a Medium of Exchange Recognition and measurement of changes in the value of money. Classification of Money Stabilization of the Price Level The Value of Money or General Level of Prices Where The Unit of Account is a Fixed Quantity of Bullion, Uncoined or Coined. The value of money or general level of prices where the unit of account is a coin of which the issue is limited. The value of money or general level of prices where the unit of account is a bank-note or currency note. Causes of Change in the General Price Level Possible Occasions of Inflation Ways of Dealing with Risk: Transfer To Specialists Choice Criteria Under Risk Hedging The origin and the functions of money Money, when its use has grown habitual The early history of money Currency in the hunting state Currency in the pastoral state Articles of ornament as currency Currency in the agriculture state Manufactured and miscellaneous articles as currency The invention of coining Qualities of the material of money Utility and value Protability Indestructibility Homogeneity Divisibility Stability of value Cognisability Legal Tender The Greenbacks - The Fluctuating Premium on Gold The Greenbacks - The Effects of Greenbacks Upon Wages Rent - Urban Rents Rent - Farm Rents Interest and Loan Capital Purchasing Power of the Principal of Loans The Rate of Interest Profits Profits in Agriculture Statistical Evidence Regarding Profits The Production and Consumption of Wealth Production Consumption Cost of the Civil War Greenbacks and Expenditures The Greenbacks and Receipts Contraction and Inflation of the Legal Tenders Passage of the Resumption Act The Struggle for Resumption The Purchasing Power of the Dollar Measurement of Changes in the Purchasing Power of Dollar Results of Changes in the General Price Level Buying Problems of the Consumer What is Good Buying? The Principles of Foreign Exchange The General Price Level Price Policies Price Flexibility Price Leadership Price Discrimination Special Pricing Practices Postage Stamp System Policy Implications

Price discrimination, representing a departure from the policy of a single price for all buyers at a given time, exists whenever a firm sells the identical item at differing prices to different buyers. It is important to remember that the commodity must be the same. For example, selling a fountain pen in a gold case and one in a plastic case, but at different prices, is not truly price discrimination. As a practical guide in pricing, some producers set out to charge what consumers will pay for their goods and end up with several class prices instead of one price. In fact, if the producer could charge each buyer his maximum price, this would be a case of perfect discrimination. Such an arrangement would be difficult, for it requires that the seller know the maximum buying price of each buyer and that no consumer shift to a lower price. Such a price policy, no doubt, would arouse considerable public indignation and antagonism when particular purchasers would learn that others were able to buy the identical items at lower prices. In addition, the attempt to administer such a price policy by an individual firm would create insurmountable accounting and record-keeping problems. There is another approach to price discrimination when the seller classifies his customers into several groups, and then announces different prices for each of these. In order for such price discrimination to exist, it is necessary that all these differences appear at the same time for the same item. Further, if the seller is to gain the advantages of his multiple-pricing policy, it is necessary that sellers who are placed into a particular group be unable to take advantage of lower group prices. This type of discrimination also tends to arouse public antagonism because the classes are artificially created by the particular seller. A more practical policy of discrimination, and the more common type when discriminatory prices are found, is for the seller to review his markets and then to determine whether there are already existing groups of buyers. An example is a classification based on industrial, commercial, or consumer use in public utility services or on wholesale, retail, and consumer buyers in marketing. Under these circumstances, it is easier for the seller to charge different prices at the same time without stirring up buyer discontent. The effects of discriminatory pricing are not all undesirable from the public standpoint. If some groups of buyers are able to pay a higher price, thus causing a lower price set for those who otherwise could not afford the purchase, there is a net gain in the total amount of public satisfaction associated with this item. The existence of a heavy proportion of fixed costs may induce the entrepreneur to seek added business at a lower per unit price than earlier sales, so long as the new business pays its out-of-pocket (or direct) costs and possibly contributes something to overhead. Ready examples of discriminatory pricing are price differentials based on geographic location, use of the commodity, type of buyer, position in the trade, or quantity of purchase. There are evidences of discrimination that are unsystematic, such as price differentials that result from individual haggling and bargaining over prices. Fluctuations in prices from moment to moment or day to day are not common, except for a few highly organized exchanges. Fluctuations over a longer period of time are more normal. To the entrepreneur, the shorter range period generally is more important; the longer range is significant for growth and planning purposes. Hence, his attention will be directed more to immediate, short-range pricing practices.