An Electric Power Company Uses Block Pricing for Electricity Sales

question 17

Multiple Choice

An electric power company uses block pricing for electricity sales. Block pricing is an example of:

• A) first-degree price discrimination.
• B) second-degree price discrimination.
• C) third-degree price discrimination.
• D) Block pricing is not a type of price discrimination.

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Definitions:

Yield To Maturity

The expected overall profit from a bond when it is kept until the date of its maturity.

Current Yield

The annual income (interest or dividends) earned from an investment, expressed as a percentage of the current price.

Annual Coupon

The fixed interest rate paid by a bond annually to its holder.

Yield To Maturity

The total return anticipated on a bond if it is held until the maturity date, considering both interest payments and capital gains or losses.