Which of the following is an example of second-degree price discrimination? Group of answer choicesa theatre that offers lower prices for seniorsan electricity company that offers lower prices for new customersa gym that charges everybody the same membership and per visit feesan airline company that offers a special discount to international students who fly from Shanghai to Sydneynone of the other answers
Question
Which of the following is an example of second-degree price discrimination? Group of answer choicesa theatre that offers lower prices for seniorsan electricity company that offers lower prices for new customersa gym that charges everybody the same membership and per visit feesan airline company that offers a special discount to international students who fly from Shanghai to Sydneynone of the other answers
Solution 1
The example of second-degree price discrimination from the given choices is: "an electricity company that offers lower prices for new customers".
Second-degree price discrimination occurs when a company charges different prices based on the quantity consumed or on whether the product or service is used during peak or off-peak times. In this case, the electricity company is offering lower prices for new customers, which could be seen as a form of quantity discount (the more you use, the less you pay per unit), or as a form of peak/off-peak pricing (new customers might be more likely to use electricity during off-peak times).
Solution 2
The correct answer is "an airline company that offers a special discount to international students who fly from Shanghai to Sydney". This is an example of second-degree price discrimination because the company is charging different prices based on the quantity or version of the good or service purchased. In this case, the airline company is offering a discount to a specific group of consumers (international students flying from Shanghai to Sydney), which is a form of price discrimination.
Similar Questions
Which of the following is not an example of price discrimination?Group of answer choicesAn ice cream parlor charges a higher price for ice cream than for sherbet.A university rebates part of the cost of tuition in the form of financial aid for economically marginalized students.A movie theater charges a lower price for a child's ticket than for an adult's ticket.A local pizza chain offers a "buy three get one free" deal.
Fill in the Blank QuestionFill in the blank question.As an example of price discrimination, airlines charge higher fares to business travelers whose demand for travel is and offer lower, more restricted fares to vacationers and others with more demand.
This exercise is about pricing strategies and price discrimination. Choose all the correct answers.Question 1Answera.Selling bread for $4, butter for $4 and bread and butter combined for $7 is an example of second degree price discrimination.b.A monopolist applying third degree price discrimination can improve consumer welfare compared to the scenario in which they set one market-level price.c.First degree price discrimination is efficient, but rarely possible in real world.d.A monopolist knows valuations of consumers, and sets prices individually for each of the consumer at the level of their valuation. This is an example of first-order price discrimination.
What is the aim of second-degree price discrimination? A. To charge higher prices to wealthier customers B. To charge different prices based on customer loyalty C. To set prices according to production costs D. To maximize revenue from different customer segments
Which of the following scenarios would fall under the category of price discrimination?Options Reduced fares for bus travel for those above the age of 60 Higher insurance premiums for young motoristsA Yes YesB Yes NoC No NoD No YesABCD
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