Price discrimination allows firms to make more money by partitioning their customers into at least two distinct groups,those who
A) the firm wants to retain as customers and those who will decide to buy elsewhere.
B) have a similar elasticity of demand and those who are unaware of their demand elasticity.
C) will get a discount and those who are willing to pay more.
D) differ from their usual customer type and those with characteristics common to their customer base.
E) are willing to pay more and those who buy whenever they see the word 'discount.'

Question

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different customers based on their willingness to pay. By partitioning customers into those who are willing to pay more (and therefore get charged higher prices) and those who need a discount to make a purchase, firms can maximize revenue and profitability. This is the essence of price discrimination, and choice C accurately describes this process.

Price Discrimination Allows Firms to Make More Money by Partitioning