Which of the following is true about price discrimination?
A) When there are a number of competing firms, price discrimination is less likely because competitors tend to undercut the high prices charged those discriminated against.
B) A profit-maximizing seller will charge a higher price for those with a greater willingness to pay, and a lower price for demanders with a lower willingness to pay.
C) Price differentials between groups will erode if reselling is easy.
D) All of the above are true of price discrimination.

Question

Quizplus · Accepted Answer

All of the statements are true about price discrimination. When there are a number of competing firms, price discrimination is less likely because competitors tend to undercut the high prices charged those discriminated against. A profit-maximizing seller will charge a higher price for those with a greater willingness to pay, and a lower price for demanders with a lower willingness to pay. Price differentials between groups will erode if reselling is easy.

Which of the Following Is True About Price Discrimination