Third-degree price discrimination occurs when a monopoly
A) separates its customers into distinct markets,charging a different price to each group.
B) charges different prices for the same good sold to the same customer.
C) requires the consumer to pay a separate fee simply for the right to purchase the good.
D) charges each customer the maximum that he is willing to pay for each item purchased.

Question

Quizplus · Accepted Answer

Third-degree price discrimination occurs when a monopoly separates its customers into distinct markets, charging a different price to each group. This is done based on the willingness to pay of each group, with the goal of capturing the maximum consumer surplus while still maximizing profits for the monopolist.

Third-Degree Price Discrimination Occurs When a Monopoly