If a firm is able to practice first- degree price discrimination, the firm will produce______ than if they charged a single price to all consumers and the firm will earn ______profit than if they charged a single price to all consumers.
A)more; less
B)more; more
C)less; less
D)less; more

Question

Quizplus · Accepted Answer

When a firm practices first-degree price discrimination, they are able to charge each individual consumer the maximum price that they are willing to pay, leading to an increase in revenue and profit for the firm. This is because the firm is able to extract more surplus from each individual consumer, resulting in more units sold and a higher profit. Therefore, the firm will produce more and earn more profit than if they charged a single price to all consumers.

If a Firm Is Able to Practice First- Degree Price