In this chapter, I consider the implications of price discrimination for prices and profits by using the Hotelling model. In particular, I first consider the case where the firms are able to set a different price at any different location (first-degree—or perfect—price discrimination). Then, I consider the case where the firms are able to set a different price at any group of locations, but not within each group (third-degree price discrimination). I show that, in general, price discrimination tends to make competition fiercer with respect to uniform pricing, thus lowering the equilibrium prices and the profits.