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Caleb McQueen
on Dec 12, 2024

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Which of the following about price discrimination is true?

A) A price-discriminating seller will charge consumers with an elastic demand a lower price than consumers with an inelastic demand.
B) A firm must face a horizontal demand curve for its product in order to engage in effective price discrimination in a market.
C) Price discrimination always harms consumers and helps sellers in the short run but in the long run, consumers benefit at the expense of sellers.
D) A seller must have a monopoly in order to gain from price discrimination.

Horizontal Demand

A market demand situation where a small change in price leads to a large change in quantity demanded, often indicative of a highly competitive market.

Elastic Demand

is a situation where the demand for a product or service significantly changes in response to a change in price.

Price Discrimination

Price Discrimination is the strategy of selling the same product at different prices to different groups of customers, based on their willingness to pay.

  • Determine the elements that affect a company's choice to adopt price differentiation strategies.
  • Acknowledge the role of price discrimination in determining consumer prices through demand elasticity.
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sreekar tatapudiDec 17, 2024
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