(Figure: Price Discrimination 2) The following figure shows a business that price discriminates. The business will produce at output level C. What range of buyers will be given a discount so that they are induced to buy the good?
A)Between A and B
B)Between B and C
C)Between C and D
D)Between A and C

Question

(Figure: Price Discrimination 2) The following figure shows a business that price discriminates. The business will produce at output level C. What range of buyers will be given a discount so that they are induced to buy the good? 
A)Between A and B 
B)Between B and C 
C)Between C and D 
D)Between A and C

Quizplus · Accepted Answer

Buyers in the range between point B and point C will be given a discount to induce them to buy the good. This is because at point B, the price is too high for these buyers, but at point C, the price is too low for the high willingness-to-pay buyers, so the business can capture more profit by offering a discount to the lower willingness-to-pay buyers in this range.

(Figure: Price Discrimination 2) the Following Figure Shows a Business