Price discrimination by a firm is
A)illegal under all circumstances.
B)legal if the firm can show that the difference in the prices charged customers is justified by a difference in the costs of serving them.
C)legal if the firm can show that the demand for its good is relatively elastic.
D)legal under all circumstances.

Question

Quizplus · Accepted Answer

Price discrimination is legal if the firm can demonstrate that the difference in prices it charges customers is justified by a difference in the costs of serving them. This is because the goal of antitrust laws is to promote competition and protect consumers, not to regulate prices. Therefore, firms can use different pricing strategies as long as they do not harm competition.

Price Discrimination by a Firm Is