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AP®︎/College Microeconomics

Lesson 3: Price discrimination

Price discrimination

AP.MICRO: PRD‑3 (EU), PRD‑3.B (LO), PRD‑3.B.8 (EK), PRD‑3.B.9 (EK)

Which of the following best defines perfect price discrimination?

(Choice A)
A firm charges all buyers different prices based on varying costs of production.
(Choice B)
A firm charges all buyers their entire willingness to pay.
(Choice C)
A firm charges a single price which is greater than the marginal cost of production.
(Choice D)
A firm charges some buyers one price and other buyers another price, but there is deadweight loss.
(Choice E)
A firm charges some buyers one price and other buyers another price, but some consumer surplus remains.