Price discrimination is used when a seller faces different demand curves in different markets because:
A) no other pricing methods are feasible.
B) the practice eliminated waste.
C) profits are greater than selling at a single price.
D) profits are less than when selling at monopoly prices.

Question

Quizplus · Accepted Answer

Price discrimination allows a seller to charge different prices to different customers based on their willingness to pay. By doing so, the seller can increase profits as they are able to capture more consumer surplus. This is because consumers who are willing to pay higher prices will do so, while those who are not willing to pay the higher price will still make the purchase at the lower price. Therefore, the seller is able to sell more units overall and at a higher total price than if they sold at a single price.

Price Discrimination Is Used When a Seller Faces Different Demand