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This turns out to be a problem for the monopolist if he wants to engage in price discrimination, as he needs to identify various levels of willingness to pay. In this paper we shall look at the different devices that a monopolist can use to extract extra surplus from consumers when consumer type is not directly observable. In the second part of this essay we shall analyse the ways in which the existence of secondary markets affects the monopolist’s ability to price discriminate. In conclusion, we shall consider how the monopolist can interfere in those secondary markets. Before we start tackling the problem of how a monopolist is able to price discriminate when consumer type is not directly observable, we should first briefly define what a monopolist is. A seller is said to be a monopolist when he produces a good or a service for which there is no close substitutes

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