If a firm sells the same product to different buyers at different prices, it may be considered:

• A. practicing perfect competition
• B. implementing price floors
• C. engaging in price discrimination
• D. using marginal cost pricing

Answer: (C)

Verified step by step guidance

1. Understand the concept of price discrimination: it occurs when a firm charges different prices to different buyers for the same product, not based on differences in cost.
2. Recall that perfect competition implies a single market price for all buyers, so selling at different prices contradicts perfect competition.
3. Recognize that price floors are government-imposed minimum prices, which do not explain charging different prices to different buyers voluntarily.
4. Marginal cost pricing means setting the price equal to the marginal cost of production, which also implies a uniform price rather than different prices for different buyers.
5. Conclude that charging different prices to different buyers for the same product is best described as engaging in price discrimination.