Price discrimination occurs when
A)price exceeds marginal cost
B)a firm charges different customers different prices,and the differences are not explained by cost factors
C)price exceeds average cost
D)a firm charges different customers different prices,where these differences are based on cost differences
E)price equals average variable cost

Question

Quizplus · Accepted Answer

Price discrimination occurs when a firm charges different customers different prices, and the differences are not explained by cost factors. This means that the firm is able to charge a higher price to some customers who are willing to pay more, while charging a lower price to other customers who are less willing or able to pay. The key aspect of price discrimination is that the differences in price are not based on differences in the cost of production or delivery, but instead are based on the willingness and ability of customers to pay different prices.

Price Discrimination Occurs When