What is the primary benefit of price discrimination?
A) There is no benefit; discrimination of any kind is wrong.
B) Charging multiple prices generates more profit for firms and matches more buyers and sellers in the marketplace.
C) It converts firms that were price makers into price takers.
D) All surplus is transferred from the producer to the consumer.
E) It takes a market with varying demand elasticities and makes them more inelastic.

Question

Quizplus · Accepted Answer

Price discrimination allows firms to capture a larger share of consumer surplus by charging different prices to different groups of consumers based on their willingness to pay. This increases profits for firms and also benefits consumers by enabling them to purchase a product at a lower price if they are more price-sensitive. As a result, price discrimination can reduce market inefficiencies and increase overall economic welfare.

What Is the Primary Benefit of Price Discrimination