Asked by Perla Arceo-Valencia on May 14, 2024
Verified
Under perfect price discrimination, consumer surplus:
A) is less than zero.
B) is greater than zero.
C) equals zero.
D) is maximized.
Perfect Price Discrimination
A pricing strategy where a seller charges each buyer their maximum willingness to pay, extracting all the consumer surplus.
Consumer Surplus
The difference between the total amount that consumers are willing and able to pay for a good or service versus the total amount that they actually do pay.
- Understand the concept and implications of perfect price discrimination.
Verified Answer
AL
Alessandra LorenceMay 15, 2024
Final Answer :
C
Explanation :
Under perfect price discrimination, a seller charges each buyer their maximum willingness to pay, thus capturing all the consumer surplus and leaving the consumer surplus equal to zero.
Learning Objectives
- Understand the concept and implications of perfect price discrimination.
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