Price discrimination
A) converts consumer surplus into economic profit.
B) converts producer surplus into economic profit.
C) maximizes the difference between consumer surplus and producer surplus.
D) converts deadweight loss into consumer surplus.

Question

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different customers based on their willingness to pay. This allows the seller to extract more consumer surplus and convert it into economic profit. By charging a lower price to customers who are less willing to pay and a higher price to those who are willing to pay more, the seller is able to capture a larger portion of the value created by the transaction. This results in a conversion of consumer surplus into economic profit.

Price Discrimination