What is one reason car dealerships might move away from perfect price discrimination to uniform pricing?
A) Perfect price discrimination doesn't work.
B) Transaction costs erode the profit of perfect price discrimination.
C) Consumers are ill-informed and tend to complain too much.
D) Uniform pricing is always more profitable and more fair as well.

Question

Quizplus · Accepted Answer

Transaction costs associated with implementing and enforcing perfect price discrimination can be high, which can erode the profits of car dealerships. Moving towards uniform pricing can simplify the sales process and potentially increase profits.

What Is One Reason Car Dealerships Might Move Away from Perfect