The case where a firm sells each unit at the maximum amount each customer is willing to pay for it is called
A) first-degree price discrimination.
B) second-degree price discrimination.
C) third-degree price discrimination.
D) nonlinear price discrimination.

Question

Quizplus · Accepted Answer

The scenario described in the question is known as first-degree price discrimination, where the firm is able to charge each customer the maximum they are willing to pay for each unit, maximizing their profits by extracting the entire consumer surplus.

The Case Where a Firm Sells Each Unit at the Maximum