Relative to uniform-price policy,price discrimination across segmented markets (sometimes called third-degree price discrimination):
A)always reduces welfare.
B)always increases welfare.
C)may increase welfare if total output falls.
D)may increase welfare if total output rises.

Question

Quizplus · Accepted Answer

Price discrimination across segmented markets may increase welfare if total output rises because it allows firms to capture more consumer surplus by charging higher prices to those who are willing to pay more while also potentially increasing output by expanding the size of the market. However, if total output falls due to market segmentation, then welfare may decrease. Therefore, option D is the best choice as it acknowledges both possibilities.

Relative to Uniform-Price Policy,price Discrimination Across Segmented Markets (Sometimes Called