Question

Figure 11.3.1 6) Refer to Figure 11.3.1 above. The price-discriminating firm earns a higher profit by: 6) A) charging an average of a high price and a low price over time. B) charging a lower price to the consumers who acquire the good first. C) charging a lower price as time goes by. D) charging a higher price as time goes by

s/Q Pi D,-AR AC-MC MK: D,- AR MR Quantity e: Figure 11.3.1 6) Refe er to Figure 11.3.1 above. The price discriminating firm earns

Answer 1

Price discriminating firms earn higher profit. The diagram, mainly reflects third degree price discrimination where firm charges different price to different individuals or groups for the same good Lower price may be charged which reflects acceptance of lower markup profit over cost which even attracts customers for that particular product. Thus, price discrimination fim as per ng lower price to the customers who acquire goods first. Thus, the correct option is "B".