Second-Degree Price Discrimination Is the Practice of Charging

question 100

Multiple Choice

Second-degree price discrimination is the practice of charging:

• A) the reservation price to each customer.
• B) different prices for different quantity blocks of the same good or service.
• C) different groups of customers different prices for the same products.
• D) each customer the maximum price that he or she is willing to pay.

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Definitions:

Discount Rate

A rate used to determine the present value of future cash flows.

Incremental Cash Flow Principle

The concept that financial decisions should be made based on the changes in cash flows that the decisions will cause, ignoring cash flows that will not be affected.

Negative Effects

Adverse outcomes or impacts that result from an action, event, or policy.

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not affect future business decisions.