Consumers prefer inefficient third degree price discrimination to efficient first degree price discrimination.

Question

Quizplus · Accepted Answer

Consumers prefer inefficient third-degree price discrimination because it allows them to pay a lower price than others, even if they could afford to pay more under efficient first-degree price discrimination. This is because third-degree price discrimination relies on demographic or other external factors to set different prices for different groups of consumers, whereas first-degree price discrimination would require each consumer to reveal their willingness to pay and pay that exact amount.

Consumers Prefer Inefficient Third Degree Price Discrimination to Efficient First