In which of the following industries may price discrimination be good?
A) industries with poor consumers
B) industries with high fixed costs of production
C) industries with low marginal costs of production
D) Price discrimination is never good, as it lowers total surplus in society.

Question

Quizplus · Accepted Answer

Industries with high fixed costs of production, such as airlines or movie theaters, may benefit from price discrimination as it allows them to charge higher prices to those who are willing to pay more, while still making sales to those who are only willing to pay a lower price. This allows them to increase their total revenue and possibly cover their fixed costs better.

In Which of the Following Industries May Price Discrimination Be