Product-based price discrimination could be used as long as
A) each market segment has the same elasticities.
B) lower prices are established for inelastic (versus elastic) consumers.
C) price differentials are greater than cost differentials.
D) each segment has the same price ceiling.

Question

Quizplus · Accepted Answer

Product-based price discrimination is effective when price differentials reflect more than just the differences in cost to serve different segments. This allows firms to capture more consumer surplus by setting prices according to consumers' willingness to pay, rather than strictly on cost.

Product-Based Price Discrimination Could Be Used as Long as