Which of the following statements about price discrimination is true?
A) It can only be used by monopolistic firms.
B) It is only possible if the good cannot be resold.
C) It maximizes consumer welfare since each consumer pays only what he is willing to pay.
D) All of the above are true.

Question

Quizplus · Accepted Answer

Price discrimination is possible even if the good can be resold. Choice A is false as price discrimination can also be used by oligopolistic firms or firms in monopolistic competition. Choice C is not always true as price discrimination can lead to inequality and some consumers may end up paying a higher price than what they are willing to pay.

Which of the Following Statements About Price Discrimination Is True