Question

Price discrimination can help improve efficiency in the market because goods are sold to more people, thus increasing profits. If all consumers have the same tastes, will a firm be able to price discriminate?

Answer 1

C) no, because the firm will not be able to distinguish among groups of consumers.

Step-by-step explanation:

Price discrimination happens when a company is able to sell the same product or service at different prices to different groups of customers. Only price maker companies (high supply power) can practice price discrimination. The customers are charged the highest price that they are willing to pay for the product or service, which reduces the consumer surplus to 0.