Group price discrimination has ________ consumer surplus than under ________.
A)more; perfect competition
B)less; perfect competition
C)more; an elastic demand curve
D)less; single-price monopoly

Question

Quizplus · Accepted Answer

Group price discrimination involves charging different prices to different groups of consumers based on their willingness to pay. This results in higher profits for the firm but generally lowers consumer surplus compared to a scenario of perfect competition or an elastic demand curve. In a single-price monopoly, the firm charges the same price to all consumers, so there is no group price discrimination. Therefore, option D is incorrect. Option A is also incorrect because perfect competition results in the highest level of consumer surplus, and any form of price discrimination would reduce it. Option C is incorrect because an elastic demand curve would provide more opportunities for a firm to engage in price discrimination, but it does not necessarily lead to higher consumer surplus. Therefore, the best answer is B, which correctly describes the trade-off between group price discrimination and consumer surplus.

Group Price Discrimination Has ________ Consumer Surplus Than Under ________

Group Price Discrimination Has Consumer Surplus Than Under