Figure 11.3.1
-Refer to Figure 11.3.1 above. The price-discriminating firm earns a higher profit by:
A) charging a lower price as time goes by.
B) charging a lower price to the consumers who acquire the good first.
C) charging a higher price as time goes by.
D) charging an average of a high price and a low price over time.

Question

Figure 11.3.1
-Refer to Figure 11.3.1 above. The price-discriminating firm earns a higher profit by:
A) charging a lower price as time goes by. 
B) charging a lower price to the consumers who acquire the good first. 
C) charging a higher price as time goes by. 
D) charging an average of a high price and a low price over time.

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different consumers based on their willingness to pay. By charging a lower price as time goes by, the firm can capture more consumer surplus from those who are willing to pay less, thus increasing overall profit.

Figure 11.3.1 -Refer to Figure 11.3.1 Above. the Price-Discriminating Firm Earns a Earns