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8 November, 17:08

Why do price discrimination and the existence of slightly different variants of the same product tend to go hand in hand? By introducing slightly different variants of the product, firms that price discriminate are able to

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  1. 8 November, 20:25
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    Separate buyers based on their income.

    Separate buyers based on their willingness to pay.

    Lower their profit.

    Lower the marginal cost of producing an additional unit of output.

    Answer:Lower the marginal cost of producing an additional unit of output.

    Explanation:Price discrimination is a pricing strategy that gives different prices for the same kind of product. Price discrimination can be classified as first degree (charging of a different price for every unit consumed), second degree (involves charging different prices for different Quantity purchased) and third degree (charging of a different price to different consumer groups).

    Through price discrimination, firms are able to make additional variants of the same product in order to Lower the marginal cost of producing an additional unit of output.
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