Economics • Economic BasicsMedium
What does 'Price Discrimination' mean in industrial organization?
A. Charging different prices to different consumers for the exact same good or service based on their willingness to pay.✓ Correct Answer
B. Imposing import tariffs on foreign goods to protect domestic industries.
C. Offering bulk discounts to wholesale buyers uniformly across all sectors.
D. Fluctuating prices daily according to international crude oil benchmark rates.
💡 Solution & Explanation
Price discrimination occurs when a firm sells the identical good or service to different buyers at varying prices not reflecting proportional cost differences, thereby capturing consumer surplus. Other options describe trade protectionism, quantity discounts based strictly on cost savings, or market-driven commodity price fluctuations rather than deliberate monopolistic pricing strategies. Microeconomic pricing models are frequently examined in economics papers.
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