Asked by Brittany Whitworth on Jun 11, 2024
Verified
Which is not true of price discrimination?
A) Successful price discrimination requires that different segments of the market have different demand elasticities.
B) Successful price discrimination will provide the firm with more profit than if it does not discriminate.
C) Successful price discrimination implies that the producer can separate customers into easily identifiable groups.
D) Successful price discrimination will generally result in a lower level of output than would be the case under a single-price monopoly.
Demand Elasticities
Measures the responsiveness of demand for a good or service to changes in its price, income levels, or other factors.
Price Discrimination
A pricing strategy where a seller charges different prices for the same product or service to different customers, based on factors like demand, cost of service, or market competition.
Single-Price Monopoly
A market condition where a monopolist sets one price for all consumers of its product, without price discrimination.
- Detail the necessary conditions for the successful implementation of price discrimination.
- Evaluate the ethical considerations and consumer perceptions related to price discrimination practices.
Verified Answer
SR
Shahd RashadJun 14, 2024
Final Answer :
D
Explanation :
Price discrimination typically results in a higher level of output compared to a single-price monopoly because it allows the firm to sell additional units to lower-valued segments of the market at lower prices, while still charging higher prices to segments with less elastic demand.
Learning Objectives
- Detail the necessary conditions for the successful implementation of price discrimination.
- Evaluate the ethical considerations and consumer perceptions related to price discrimination practices.