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The essential difference between these two things is that one of them is an attitude or a feeling while the other is an action.
Prejudice is a negative feeling towards the members of a given group. It occurs when we prejudge all members of a group and believe that they all have some negative qualities until we see otherwise. Discrimination is when we actually treat members of some group more poorly because of their group affiliation. This is an action, not a belief.
Prejudice, then, is an attitude or belief. It is possible to be prejudiced without acting on that prejudice by discriminating. At the same time, one could discriminate (for example, because one was required to do so) without believing the other person's group is actually inferior.
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