Which of the following best describes perfect price discrimination?
Choose 1 answer:
(A) The ability to charge different buyers their entire willingness to pay for goods with identical production costs
(B) The ability to charge each customer the marginal cost of production.
(C) The illegal practice of charging some groups of buyers one price and other groups of buyers a different price

D The ability to set a single price for a good based on buyer characteristics.
(E) The ability to charge one group of buyers a different price than another group of buyers, even though the purchased goods have identical production costs

Question

Which of the following best describes perfect price discrimination?
Choose 1 answer:
(A) The ability to charge different buyers their entire willingness to pay for goods with identical production costs
(B) The ability to charge each customer the marginal cost of production.
(C) The illegal practice of charging some groups of buyers one price and other groups of buyers a different price

D The ability to set a single price for a good based on buyer characteristics.
(E) The ability to charge one group of buyers a different price than another group of buyers, even though the purchased goods have identical production costs

Accepted Answer

∻Solution∻ ‖ a ⋮ Definition of Perfect Price Discrimination: Perfect price discrimination occurs when a seller charges each buyer their maximum willingness to pay. ‖ ‖ b ⋮ Elimination of Consumer Surplus: Under perfect price discrimination, the seller captures the entire consumer surplus by charging each consumer exactly what they are willing to pay. ‖ ‖ c ⋮ Comparison with Options: Comparing the provided options, (A) aligns with the definition and implications of perfect price discrimination. ‖ ∻Answer∻ ⚹ (A) The ability to charge different buyers their entire willingness to pay for goods with identical production costs ⚹ ∻Key Concept∻ ⚹ Perfect Price Discrimination ⚹ ∻Explanation∻ ⚹ Perfect price discrimination allows a seller to charge each buyer their maximum willingness to pay, thus capturing the entire consumer surplus. ⚹◊What factors determine the level of price discrimination that firms can engage in?⍭ Generate me a similar question◊

Sia