Price discrimination occurs when a firm sells
A) a given product at different prices at different points in time.
B) a given product at different prices to different ethnic groups.
C) a given product at different prices unrelated to differences in cost.
D) a given product at different prices when it is produced in different colors.

Question

Quizplus · Accepted Answer

Price discrimination happens when a company sells the same product or service at different prices, which is not related to differences in cost. It involves charging a higher price to customers who are willing to pay more and a lower price to customers who are willing to pay less, based on their willingness to pay. This strategy enables firms to increase profits by segmenting consumers and charging what each group is willing to pay.

Price Discrimination Occurs When a Firm Sells