Which of the following best defines price discrimination?

Charging different prices on the basis of race
Charging different prices for goods with different costs of production
Charging different prices based on cost of service differences
Selling a certain product of given quality and cost per unit at different prices to different buyers

The correct answer is D. Selling a certain product of given quality and cost per unit at different prices to different buyers.

Price discrimination is a pricing strategy in which a firm charges different prices for the same product or service to different consumers. This can be done based on a variety of factors, such as the consumer’s willingness to pay, the cost of production, or the level of competition.

Price discrimination can be a profitable strategy for firms, as it allows them to capture more of the consumer surplus. However, it can also be controversial, as it can lead to higher prices for some consumers.

Option A is incorrect because it is not a form of price discrimination. Charging different prices on the basis of race is illegal in most countries.

Option B is incorrect because it is not a form of price discrimination. Charging different prices for goods with different costs of production is a common practice in many industries.

Option C is incorrect because it is not a form of price discrimination. Charging different prices based on cost of service differences is a common practice in many industries.