Question

Perfect price discrimination is

a. unlikely to occur because firms are typically able to keep consumers who buy a product at a low price from reselling it.
b. unlikely to occur because firms typically do not know how much each consumer is willing to pay.
c. likely to occur because it results in economic efficiency.
d. likely to occur because it results in higher profits.
e. both a and
b.

Answer 1

Perfect price discrimination is unlikely to occur because firms typically do not know how much each consumer is willing to pay. Perfect price discrimination is defined as a company or person charging consumers different prices for the same good or service depending on what they are willing to pay for the product. In reality, no company will be able to accurately depict what they think each consumer that wants to purchase the product is willing to pay, so this is very unlikely to occur.