Which of the following is true of price discrimination?
A)It involves charging whatever the market will bear.
B)In a competitive market,prices may have to be higher than in a market where the firm has a monopoly.
C)It makes economic sense to charge the same prices in different countries.
D)It exists whenever consumers in different countries are charged the same price for the same product,irrespective of variations.
E)It cannot help a company maximize its profits.

Question

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different customers or groups of customers based on their willingness to pay. It does not necessarily involve charging whatever the market will bear, but rather charging different prices to capture more consumer surplus and increase profits.

B) In a competitive market, firms cannot charge higher prices without losing customers to competitors, thus price discrimination may be less effective in such markets.

C) Prices may vary between different countries due to differences in market conditions, income levels, and other factors.

D) This is incorrect; price discrimination involves charging different prices to different groups of consumers, not the same price to everyone.

E) Price discrimination can help a company maximize profits by capturing more consumer surplus and adjusting prices based on different demand elasticities.

Which of the Following Is True of Price Discrimination