Answered

Which of the following best describes perfect price discrimination?

A. The ability to charge each customer the marginal cost of production.

B. The illegal practice of charging some groups of buyers one price and other groups of buyers a different price.

C. The ability to set a single price for a good based on buyer characteristics.

D. The ability to charge one group of buyers a different price than another group of buyers, even though the purchased goods have identical production costs.

E. The ability to charge different buyers their entire willingness to pay for goods with identical production costs.



Answer :

GinnyAnswer

Final answer:

Perfect price discrimination involves charging buyers their entire willingness to pay, maximizing profits for the seller.


Explanation:

Perfect price discrimination, also known as first-degree price discrimination, involves the ability to charge different buyers their entire willingness to pay for goods with identical production costs. This strategy allows the seller to charge the maximum price each buyer is willing to pay, eliminating consumer surplus and maximizing profits. Through perfect price discrimination, the seller can charge a high price for the first unit and progressively lower prices for additional units.


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