Economists generally view the practice of perfect price discrimination favorably because it:
A)maximizes consumer surplus.
B)forces rich people to pay higher prices.
C)deters monopoly pricing.
D)eliminates deadweight loss.

Question

Quizplus · Accepted Answer

Economists generally view the practice of perfect price discrimination favorably because it eliminates deadweight loss. Perfect price discrimination occurs when a firm charges each customer their reservation price, which is the highest price a consumer is willing to pay for a good or service. This means every consumer pays the maximum price they are willing to pay, which maximizes the firm's profits and eliminates the deadweight loss that occurs from charging a single price for all consumers. Therefore, perfect price discrimination is efficient and economically desirable.

Economists Generally View the Practice of Perfect Price Discrimination Favorably