The strategy underlying price discrimination is Group of answer choices to charge higher prices to customers who have good substitutes available to them and lower prices to customers without many substitutes available to them.. to charge everyone the same price but limit the quantity they are allowed to buy. to increase total revenue by charging higher prices to those with the most inelastic demand for the product and lower prices to those with the most elastic demand. to reduce per-unit cost by charging higher prices to those with the most inelastic demand and lower prices to those with the most elastic demand.

to increase total revenue by charging higher prices to those with the most inelastic demand for the product and lower prices to those with the most elastic demand.

Explanation:

Price discrimination is when the same product is sold at different prices to customers in different markets

types of price discrimination

1. first degree price discrimination : here sellers charge each consumer at their willingness to pay in order to eliminate consumer surplus.

2. second degree price discrimination : here firms offer different prices depending on the quantity purchased. e.g. giving discounts for bulk purchases.  

3, third degree price discrimination : firms charge different prices to different groups of customers. e.g. having a certain price for senior citizens, students  

Requirements to practice successful price discrimination  

1.The firm must have market power. If the firm does not have market power and attempts to price discriminate they would lose customers

2.The firm must have different elasticities of demand for their product in different markets. the firm should charge the higher price in the market with the less elastic demand.

3.The firm must be able to segment the market for their products  

4. the firm's product should have a lot of close substitutes.

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