Price discrimination occurs when a firm
A) charges customers different prices for different goods.
B) is able to sell different units of a good at different prices.
C) charges customers the same price for different goods.
D) can determine which of the many market equilibrium prices it will charge.
E) has a marginal cost curve that is horizontal.

Question

Quizplus · Accepted Answer

Price discrimination occurs when a firm is able to sell different units of a good at different prices, allowing them to extract more consumer surplus and increase profits. This typically requires the firm to have some market power and be able to identify different groups of consumers with varying price elasticities of demand.

Price Discrimination Occurs When a Firm