Which of the following is true of perfect price discrimination?
A)Profit is lower than it would be without discrimination.
B)Revenue is higher than it would be without discrimination, but profit is lower.
C)Average revenue and average cost are both higher than they would be without discrimination, so it is not certain whether profit will be higher.
D)Consumer surplus is zero.
E)Profit is zero.

Question

Quizplus · Accepted Answer

Perfect price discrimination charges each customer their maximum willingness to pay, therefore eliminating consumer surplus. This means that the company captures all of the surplus, resulting in zero consumer surplus. However, this also means that profit is maximized.

Which of the Following Is True of Perfect Price Discrimination