What does successful price discrimination have a negative effect on?
A) deadweight loss
B) economic profits
C) output level
D) marginal revenue

Question

Quizplus · Accepted Answer

Successful price discrimination reduces deadweight loss because it allows the firm to sell more units of a good or service at different prices to different consumers, capturing more of the consumer surplus and converting it into economic profit. This process typically results in a more efficient allocation of resources, as it can lead to an increase in the quantity sold, bringing the market closer to the socially optimal output level.

What Does Successful Price Discrimination Have a Negative Effect On