Price discrimination exists when
A) a firm charges different buyers different prices for its product but the costs are the same.
B) each buyer is treated equally.
C) sales are made below cost.
D) a firm charges each buyer a price of the product in proportion to its costs.

Question

Quizplus · Accepted Answer

Price discrimination occurs when a firm charges different prices to different buyers for the same product, even though the costs of producing the product are the same. This can result in the firm earning higher profits by charging higher prices to buyers who are willing to pay more, while still selling to buyers who are less willing to pay at a lower price.

Price Discrimination Exists When