When a company practices price discrimination, it will keep adding customers until the point where the
A)last customer's marginal benefit equals the marginal quantity.
B)last customer's marginal benefit exceeds the company's marginal cost.
C)company's marginal cost exceeds the last customer's marginal benefit.
D)company's marginal cost equals the last customer's marginal benefit.

Question

Quizplus · Accepted Answer

Price discrimination aims to maximize profits by charging different prices to different customers based on their willingness to pay. The company will continue to add customers until the point where the cost of serving the last customer (marginal cost) equals the benefit that the last customer derives from the product (marginal benefit). This ensures that the company maximizes its profit without losing potential customers who are willing to pay more than the marginal cost.

When a Company Practices Price Discrimination, It Will Keep Adding