Because it is based on differences in the price elasticity of demand among different groups of consumers,third-degree price discrimination is a more profitable price discrimination strategy than is first-degree price discrimination.

Question

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First-degree price discrimination, also known as perfect price discrimination, involves charging each consumer the maximum they are willing to pay, potentially capturing the entire consumer surplus and leading to higher profits compared to third-degree price discrimination, which involves charging different prices to different groups based on their price elasticity of demand.

Because It Is Based on Differences in the Price Elasticity