Second- degree price discrimination allows firms to do all of the following except which one?
A)earn less profit compared to charging the profit- maximizing price for all units
B)change some of the consumer surplus into profit
C)receive a higher price of the first units sold
D)sell more units

Question

Quizplus · Accepted Answer

Second-degree price discrimination allows a firm to earn more profit by charging a higher price for the first units sold and a lower price for subsequent units. This enables the firm to convert some of the consumer surplus into profit, while still selling more units overall. Therefore, option A is the incorrect statement as second-degree price discrimination allows firms to earn more profit compared to charging the profit-maximizing price for all units.

Second- Degree Price Discrimination Allows Firms to Do All of the Following