Price discrimination
A)forces monopolies to charge a lower price as a result of government regulation.
B)is an attempt by a monopoly to prevent some customers from purchasing its product by charging a high price.
C)is an attempt by a monopoly to increases its profit by selling the same good to different customers at different prices.
D)increases the consumer surplus associated with a monopolistic market.

Question

Quizplus · Accepted Answer

Price discrimination is when a monopolist charges different prices to different groups of consumers based on their willingness to pay. This enables the monopolist to increase its profits by charging a higher price to those with a relatively higher demand for the product and a lower price to those with a relatively lower demand. Hence, C is the correct choice. A, B, and D are incorrect because price discrimination is not the result of government regulation, it is not an attempt to prevent some customers from purchasing the product, and it does not necessarily increase consumer surplus in a monopolistic market.

Price Discrimination