Third-degree price discrimination involves:
A) charging each consumer the same two part tariff.
B) charging lower prices the greater the quantity purchased.
C) the use of increasing block rate pricing.
D) charging different prices to different groups based upon differences in elasticity of demand.

Question

Quizplus · Accepted Answer

Third-degree price discrimination involves charging different prices to different groups based upon differences in elasticity of demand. This allows the seller to capture more consumer surplus by charging higher prices to those with relatively inelastic demand while still attracting customers with more price-sensitive demand by offering lower prices.

Third-Degree Price Discrimination Involves