A price-discriminating monopoly firm will tend to charge a higher price to customers with a greater willingness to pay than it does to customers with a lower willingness to pay.

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Price discrimination involves charging different prices to different groups of customers based on their willingness or ability to pay. A price-discriminating monopoly firm will charge a higher price to customers with a greater willingness to pay, such as those who value the product more or have a higher income. This is done in order to increase profits by capturing a larger portion of the consumer surplus. Customers with a lower willingness to pay will be charged a lower price in order to capture their business as well.

A Price-Discriminating Monopoly Firm Will Tend to Charge a Higher