The strategy of charging different prices to different customers,for the same product,based on the differences in their demand elasticities is referred to as:
A)predatory pricing.
B)price skimming.
C)arbitrage.
D)price discrimination.

Question

Quizplus · Accepted Answer

Price discrimination refers to the strategy of charging different prices to different customers, for the same product, based on the differences in their demand elasticities. This allows the seller to extract more surplus from customers who are willing to pay higher prices for the product while still making sales to customers who are more price-sensitive. This is a common pricing strategy used by businesses operating in industries where customer demand varies widely.

The Strategy of Charging Different Prices to Different Customers,for the Same