Price discrimination refers to a situation when a producer sells the same product to different buyers at two or more different prices for reasons not associated with difference in the cost of supplying the product to different consumers.

For Ex: 

1. Many hospitals charge lower operation fees from the poor patients & higher fess from the rich patients. 

2. Indian Railways charge lower freight rates for transporting essential product like food products, coal, etc. as compared to other products.

In simple words, charging different price for the same product or service from the different consumers on the basis of personal, situational and trade considerations is termed as price discrimination.

In Monopoly, it is relevant. In order to maximise his profit the monopolist adopts the policy of price discrimination. The idea behind this policy is the inability of the monopolist to charge higher price for the same goods or services from all the consumers, because in such situation a large number of persons with limited means will not be able to purchase the commodity and consequently the demand, output and profit will fall. This is why in order to maximise his profit the monopolist discriminates among buyers in respect of price.

The two similarities between a Perfect Market and a Monopolistically Competitive Market are:

1. All of these markets systems must produce at the quantity of maximum profit if they want to make the most amount of money. 

2. The price maximization condition of both the markets is marginal cost equals to marginal revenue (MC=MR)