Asked by chand Afrin on Sep 24, 2024
Verified
The consequences of price discrimination are
A) Consummate more transactions
B) Extract more consumer surplus
C) Increase producer surplus
D) All of the above
Price Discrimination
The practice of selling the same product to different buyers at different prices, based on factors other than cost.
Consumer Surplus
The difference between the total amount consumers are willing to pay for a good or service and the actual amount they pay.
Producer Surplus
The difference between the amount producers are willing to sell a good for and the actual amount they receive by selling it at the market price.
- Assess the influence of variable pricing strategies on consumer and producer gains.
Verified Answer
DD
Dreamation Designs3 days ago
Final Answer :
D
Explanation :
Price discrimination allows firms to consummate more transactions by catering to different groups of consumers with varied price elasticities of demand. By charging different prices to different groups, firms can extract more consumer surplus and increase their overall profits, leading to increased producer surplus. Therefore, all of the above options are consequences of price discrimination.
Learning Objectives
- Assess the influence of variable pricing strategies on consumer and producer gains.