Imperfect price discrimination occurs when
A) the monopolist charges a single price to all consumers.
B) some buyers pay less than their reservation price.
C) some buyers pay more than their reservation price.
D) all buyers pay less than their reservation price.
E) all buyers pay their reservation price.

Question

Quizplus · Accepted Answer

Imperfect price discrimination occurs when some buyers pay less than their reservation price, but not all buyers pay their reservation price. The monopolist is able to charge different prices based on the perceived willingness to pay of each individual consumer, but does not have perfect knowledge of each consumer's reservation price. This results in some buyers receiving a discount, while others may still pay more than their reservation price.

Imperfect Price Discrimination Occurs When