When price discriminating, a company owner should set price _____ for each customer.
A)equal to marginal cost
B)at the competitive market equilibrium
C)no higher than marginal cost
D)at or just below the marginal benefit

Question

Quizplus · Accepted Answer

When price discriminating, a company owner should set price at or just below the marginal benefit for each customer. This is because the goal of price discrimination is to capture the maximum amount of consumer surplus, and setting the price at or just below the marginal benefit for each customer ensures that they will be willing to pay that price for the product or service. If the price is set higher, some customers may choose to go without the product or service, resulting in lost revenue for the company.

When Price Discriminating, a Company Owner Should Set Price _____