Why Is Price Discrimination Legal but Not Discrimination Based on Race

Multiple Choice

Why is price discrimination legal but not discrimination based on race or gender?

A) Because price discrimination increases profits and therefore tax revenues for the government, but discrimination based on race or gender reduces tax revenues
B) Because price discrimination reduces deadweight loss, but discrimination based on race or gender increases deadweight loss
C) Because price discrimination involves charging people different prices based on their willingness to pay rather than on the basis of arbitrary characteristics
D) Because price discrimination enables firms to increase output and employment, but race- or gender-based discrimination reduces employment