Price discrimination is considered bad when:
A) total surplus increases.
B) total surplus decreases.
C) deadweight loss is diminisheC.
D) it is practiced by any firm.

Question

Quizplus · Accepted Answer

Price discrimination can lead to a decrease in total surplus because it creates different prices for the same product or service, which can result in a transfer of surplus from some consumers to the producer, reducing overall welfare. Deadweight loss may decrease, but total surplus is the more important factor to consider in evaluating whether price discrimination is good or bad. Therefore, if price discrimination results in a decrease in total surplus, it is considered bad.

Price Discrimination Is Considered Bad When