In pricing strategies, what occurs when a firm charges different prices to different consumer segments for the identical service, based on willingness to pay?
Answer and explanation
Correct answer: C. Price discrimination
- Step 1: Price discrimination is the practice of charging different prices to different buyers for the same good or service without corresponding differences in production costs (e.g. student discounts). Answer: Price discrimination. Why not the others: Predatory dumping sells below cost to eliminate rivals, cost-plus pricing adds a standard markup, and penetration pricing launches with low initial prices.
Practise more Microeconomics, Business Operations, Financial Management and the Macroeconomic Environment.
Free questions with an explanation for every one, and full timed Poklicna matura (Vocational Matura Slovenia) mock tests.
More Microeconomics, Business Operations, Financial Management and the Macroeconomic Environment questions
- In microeconomics, what fundamental economic concept describes the value of the next best alternative forgone when making a decision?
- In market analysis, what effect does an increase in the market price of a normal good generally have on consumer demand, ceteris paribus?
- In microeconomic theory, what is the term for a market structure characterized by a single seller supplying a unique product with no close s…
- In business production, which of the following is classified as a fixed cost in the short run?
- In price elasticity analysis, what does a price elasticity of demand coefficient with an absolute value greater than one (|Ed| > 1) indicate…
- In economic analysis, at what point is market equilibrium achieved in a competitive market for consumer goods?