Which of the following statements is true of price discrimination?
A) Successful price discrimination will provide the firm with lower total profits than if it did not discriminate.
B) Successful price discrimination will provide the firm with more profit than if it did not discriminate.
C) Successful price discrimination will generally result in a lower level of output than would be the case under a single-price monopoly.
D) Successful price discrimination occurs when there are differences in the costs of producing for different groups of buyers.

Question

Quizplus · Accepted Answer

Price discrimination allows firms to charge different prices to different segments of consumers, resulting in higher overall profits. By charging different prices, the firm can capture more of the consumer surplus and increase its revenues. This strategy can result in higher profits than if the firm charged a single price for all consumers.

Which of the Following Statements Is True of Price Discrimination