If a seller is able to charge each consumer exactly their maximum (marginal) willingness-to-pay, they are practicing:
A) First-degree price discrimination.
B) Second-degree price-discrimination.
C) Third-degree price discrimination.
D) Hyperbolic price discrimination.

Question

Quizplus · Accepted Answer

First-degree price discrimination, also known as perfect price discrimination, occurs when a seller charges each consumer the exact maximum price they are willing to pay. This requires that the seller knows each individual consumer's willingness-to-pay and is able to distinguish between consumers.

If a Seller Is Able to Charge Each Consumer Exactly