Price discrimination,if possible,allows a price-setting firm to increase its profits by

Question

Quizplus · Accepted Answer

Price discrimination allows a firm to charge different prices to different consumers based on their willingness to pay. By doing so, the firm can increase its profits as it can capture a larger portion of the consumer surplus. This is because consumers who are willing to pay more will pay a higher price, while those who are not willing to pay as much will pay a lower price. This allows the firm to cater to different segments of the market and capture more profit from each segment. Therefore, choice C is the correct answer.

Price Discrimination,if Possible,allows a Price-Setting Firm to Increase Its Profits