Why do firms price discriminate?
A)To reduce the quantity sold so as to reduce production costs.
B)To increase profits.
C)To take advantage of customers.
D)To increase total economic surplus.

Question

Quizplus · Accepted Answer

Firms price discriminate in order to increase their profits. By charging different prices to different customers based on their willingness to pay, the firm can capture more of the total surplus available in the market. This allows them to increase their revenue and profit margins.

Why Do Firms Price Discriminate