Microsoft has a special version of its Windows operating system that it sells at a low price in countries where cheap pirated software is widespread. The cost of producing another copy of this software is the same as the cost of producing another copy of the regular Windows product. Selling this "special edition" software at a low price in certain countries is very similar to what economists call:
A) price discrimination.
B) natural monopoly.
C) a price taker.
D) welfare loss.

Question

Quizplus · Accepted Answer

Price discrimination occurs when a company sells the same product at different prices to different markets or segments, which is what Microsoft is doing by offering a lower-priced version in certain countries.

Microsoft Has a Special Version of Its Windows Operating System