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It is common economic knowledge/theory. My citation is any economic textbook on price discrimination. Let me give you an extreme example. Imagine that a comp
by stale2002 9y ago
It is common economic knowledge/theory. My citation is any economic textbook on price discrimination.
Let me give you an extreme example.
Imagine that a company perfectly knew the exact maximum amount of dollars that you personally are willing to pay for their product. Then, they offer you that product for 1$ less than your maximum.
This is called perfect 1st degree price discrimination, and results in ~zero consumer welfare, because consumer welfare is the difference between actual price paid, and max willingness to pay price, which in this case are both ~equal to one another.