Price discrimination works best when
A)Sellers cannot meet collectively.
B)Buyers do not have perfect information about the price.
C)Buyers have information about prices charged to different customers.

Question

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different customers based on their willingness to pay. This strategy works best when buyers do not have perfect information about the price, because if they did, they would all be willing to pay the lowest price and the seller would not be able to charge higher prices to those willing to pay more. By keeping the prices charged to different customers secret, the seller can charge higher prices to those who are willing to pay more without causing those who are only willing to pay the lowest price to defect to a competitor.

Price Discrimination Works Best When