Explain why a firm can earn more profit by price discrimination ...

[eruditmonkey@yahoo.com]

Explain why a firm can earn more profit by price discrimination than from setting a uniform price.
 
  What will be an ideal response?

Question 2

Firms price discriminate to maximize total revenue.
 
  Indicate whether the statement is true or false

[ndhahbi]

Answer to Question 1

First, price discrimination allows a firm to charge a higher price to customers who are willing to pay more than the uniform price. The firm captures more of the consumer surplus. Second, a price-discriminating firm can sell to additional customers who were unwilling to pay the uniform price.

Answer to Question 2

False. Firms price discriminate to increases profit.