Which is not true of price discrimination?
A) Successful price discrimination requires that different segments of the market have different demand elasticities.
B) Successful price discrimination will provide the firm with more profit than if it does not discriminate.
C) Successful price discrimination implies that the producer can separate customers into easily identifiable groups.
D) Successful price discrimination will generally result in a lower level of output than would be the case under a single-price monopoly.

Question

Quizplus · Accepted Answer

Successful price discrimination allows firms to charge different prices to different customers based on their willingness to pay, which can increase profits. However, this often leads to a lower level of output as the firm reduces output in the higher-priced segments to prevent customers from switching to lower-priced segments. Thus, statement D is incorrect, as successful price discrimination can result in a lower level of output.

Which Is Not True of Price Discrimination