Price discrimination works best when
A)Sellers cannot meet collectively.
B)Buyers do not have perfect information about the price.
C)Buyers have information about prices charged to different customers.
D)A product is purchased frequently by consumers.

Question

Quizplus · Accepted Answer

Price discrimination relies on sellers being able to charge different prices to different customers. If buyers have perfect information about prices, they will be able to avoid the higher prices charged to some customers. Therefore, in order for price discrimination to work best, buyers should not have perfect information about the price.

Price Discrimination Works Best When