Price Discrimination

Which of the following is NOT an example of price discrimination?

• Public transport discounts for students and the elderly

• Airlines charging higher prices during holiday season

• Petrol stations providing cheaper fuel on certain days of the week

• Differences in price between first class and economy class air travel

Which of the following is NOT a necessary condition for price discrimination to take place?

• A range of PEDs exist among consumers

• A lack of information availability and information transparency

• The firm operates in an imperfect competitive market

• The firm must be able to segment and separate its customers

Which form of price discrimination involves charging each customer the maximum price they are willing and able to pay?

• 1st degree

• 2nd degree

• 3rd degree

• 4th degree

Under what form of price discrimination would consumer surplus be eliminated completely?

• 1st degree

• 2nd degree

• 3rd degree

• 4th degree

Which of the following statements applies to a price discriminating firm?

• It exploits consumers, especially the poor

• It achieves productive efficiency

• It provides lower prices when the quantity purchased rises

• It charges different prices for the same product

Which of the following uses first degree price discrimination?

• Real estate agents selling residential property

• Starbucks rewarding loyal customers with discounts based on how many beverages they consume over a certain period of time

• Airlines charging customers higher prices during the holiday season

• Petrol stations providing cheaper fuel on certain days of the week

A monopoly that engages in second degree price discrimination will have ______ revenues and ______ profits than a firm which does not practice any price discrimination

• Lower, higher

• lower, lower

• higher, higher

• higher, lower

Which of the following is an example of second degree price discrimination?

• Charging the maximum price a customer is willing and able to pay

• Females being charged more than males for their haircuts

• Customer loyalty schemes

• Student discounts at the cinema

Assume a telecommunications firm charges $10 for the first 500 text messages sent by a user, and $0.10 for every message thereafter. This is an example of ____ price discrimination.

• 1st degree

• 2nd degree

• 3rd degree

• 4th degree

Which form of price discrimination seeks to charge people from different market segments different prices for the same product?

• 1st degree

• 2nd degree

• 3rd degree

• 4th degree