How Does Price Discrimination Help Cover Fixed Costs

Multiple Choice

How does price discrimination help cover fixed costs?

A) If price discrimination expands the size of the market, the fixed costs can be spread over a much larger output level.
B) If price discrimination lowers profits, firms will produce less and have lower fixed costs.
C) Consumers with inelastic demand are less costly to serve, lowering the fixed costs of production.
D) Consumers with elastic demand are less costly to serve, lowering the fixed costs of production.