A price-discriminating firm will always maximize profit by following the condition that

Question

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A price-discriminating firm maximizes profit by charging different prices to different groups of consumers based on their willingness to pay. In order to achieve this, the firm must set the price for each group where the marginal revenue (MR) for that group is equal to the marginal cost (MC) of producing the product. Therefore, the condition for profit maximization in price discrimination is MRₐ = MRb = MC, where MRₐ and MRb are the marginal revenues from each group. Option C correctly reflects this condition.

A Price-Discriminating Firm Will Always Maximize Profit by Following the Condition