In second-degree price discrimination it is true that
A)people who buy a lot pay a lower price.
B)people who buy relatively little pay a lower price.
C)the monopolist cannot earn economic profits.
D)the market need not be segmented.

Question

Quizplus · Accepted Answer

In second-degree price discrimination, the monopolist charges different prices based on the quantity purchased, implying that people who buy more pay a lower price per unit than those who buy less. Therefore, option A is correct. Option B is incorrect because people who buy relatively little usually pay a higher price per unit. Option C is not correct as the monopolist can still earn economic profit if they can increase the overall quantity demanded by segmenting the market. Option D is not accurate as the market needs to be segmented to implement second-degree price discrimination.

In Second-Degree Price Discrimination It Is True That