Which of the following is true?

Question

Quizplus · Accepted Answer

This is true because a seller charging a higher price to consumers with inelastic demand is able to do so without affecting their demand much, while charging a lower price to consumers with elastic demand increases their willingness to buy the product. This allows the seller to extract more surplus from consumers overall.

B is false because firms can engage in effective price discrimination with a downward-sloping (but not perfectly elastic) demand curve.

C is false because while price discrimination may harm some consumers, it can also benefit others and increase overall welfare. Sellers may benefit in the short run, but price discrimination can also increase competition and efficiency in the long run.

D is false because sellers can engage in price discrimination in oligopolistic markets or even in perfectly competitive markets under certain conditions. A monopoly simply makes price discrimination easier to execute.

Which of the Following Is True