Relative to simple pricing,price discrimination leads to
A)Consumer surplus being converted to producer surplus
B)Increased profits
C)A simplified pricing schedule
D)Both a and b

Question

​Relative to simple pricing,price discrimination leads to
A)​Consumer surplus being converted to producer surplus
B)Increased profits
C)A simplified pricing schedule
D)​Both a and b

Quizplus · Accepted Answer

Price discrimination allows firms to charge different prices to different groups of customers based on their willingness to pay. This increases profits as the firm can capture more of the total consumer surplus. By charging higher prices to customers who are willing to pay more, the firm can convert some of the consumer surplus into producer surplus. Therefore, both A and B are correct. On the other hand, price discrimination does not simplify the pricing schedule, so option C is incorrect.

​Relative to Simple Pricing,price Discrimination Leads to

Relative to Simple Pricing,price Discrimination Leads to