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Microeconomics Question from Walter E. Williams:Edit

Price discrimination may lead to more efficient allocation of resources. Do you agree or disagree? Explain first what you mean by efficient allocation of resources.

AnswerEdit

Efficient allocation of resources is one in which all exchange opportunities have been realized. Price discrimination is efficient because it captures for the producer o9the maximum that each consumer is willing to pay, without any net loss to society. Consumers do not lose because they are still only paying for a good the value they place on having that good. Price discrimination also can lead to a larger output.

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