Why, from an Economic Perspective, Is Price Discrimination Desirable

question 196

Multiple Choice

Why, from an economic perspective, is price discrimination desirable?

• A)The increase in profits is more than offset by the loss in consumer surplus, resulting in a net increase in economic surplus.
• B)It enables firms to increase profits with no loss in economic surplus, and in turn, this could provide firms with incentives to engage in beneficial product innovation.
• C)The increase in profits results in higher corporate tax revenues received by the government, which could be used to subsidise consumption for low-income individuals.
• D)It redistributes wealth from wealthy consumers to highly innovative firms.