Price discrimination allows businesses to...

Price discrimination allows businesses to adjust prices based on different consumer abilities to pay, which means they can charge different prices for the same product or service depending on various factors. This strategy enables businesses to maximize their revenue by capturing consumer surplus. By differentiating prices, companies can reach a wider range of customers, including those who are willing to pay more and those who may only be able to afford a lower price. For example, airlines often use price discrimination by charging different prices for tickets based on factors such as booking time, demand, and the customer's age.

This approach enhances market efficiency as it allows goods or services to be sold to different segments of the market. The ability to tailor prices increases access for some customers who might not otherwise purchase the product at a higher, uniform price, thus benefiting both the business and the consumers. The other options do not accurately reflect the principles of price discrimination; they describe charging uniform prices or offering lower prices indiscriminately, which are not aligned with the practice of segmenting market pricing based on willingness and ability to pay.