Assume a firm sells its product in two continents. If the firm engages in third-degree price discrimination, it will make sure that the quantities sold in each market are the same.

Question

Quizplus · Accepted Answer

In third-degree price discrimination, a firm charges different prices in different markets based on differences in elasticity of demand, not to equalize quantities sold across markets.

Assume a Firm Sells Its Product in Two Continents