Perfect price discrimination consists of
A)charging each customer their reservation price.
B)charging each customer based on the marginal cost.
C)basing price on the highest marginal cost the customer is willing to pay.
D)charging each customer the lowest price they are willing to pay.

Question

Quizplus · Accepted Answer

Perfect price discrimination occurs when a firm charges each customer their reservation price, which is the highest price the customer is willing to pay for a given quantity of a good or service. This allows the firm to capture all of the consumer surplus and maximize their profits. None of the other options reflect perfect price discrimination.

Perfect Price Discrimination Consists of