Firms that can effectively price discriminate can increase profitability when they engage in:
A) predatory pricing.
B) limit pricing.
C) strategies that raises rivals' costs.
D) Any of the statements associated with this question are correct.

Question

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different consumers for the same product, based on their willingness to pay. This can increase profitability by capturing more consumer surplus. Predatory pricing, limit pricing, and strategies that raise rivals' costs can all be part of broader competitive strategies to increase market share or deter entry, which, when combined with effective price discrimination, can further enhance a firm's profitability.

Firms That Can Effectively Price Discriminate Can Increase Profitability When