When is price discrimination a rational strategy for a profit-maximizing monopolist
A)when the monopolist finds itself able to produce only limited amounts of output
B)when consumers are unable to be segmented into identifiable markets
C)when the monopolist wishes to increase the deadweight loss that results from profit-maximizing behaviour
D)when there is no opportunity for arbitrage across market segmentations

Question

Quizplus · Accepted Answer

Price discrimination is rational when there is no opportunity for arbitrage, as it allows the monopolist to charge different prices to different segments, maximizing profits without the risk of consumers buying at a lower price and reselling at a higher price.

When Is Price Discrimination a Rational Strategy for a Profit-Maximizing