Which of the following leads to the largest gains from trade?
A)second degree price discrimination
B)first degree price discrimination
C)tie- in sales
D)third degree price discrimination

Question

Quizplus · Accepted Answer

First degree price discrimination, also known as perfect price discrimination, allows the seller to charge each individual customer their maximum willingness to pay, resulting in the largest possible gains from trade for the seller. This is because the seller can capture all of the consumer surplus for themselves. However, first degree price discrimination is difficult to implement in practice as it requires perfect information about each customer's willingness to pay.

Which of the Following Leads to the Largest Gains from Trade