Which of the Following Is an Example of Price Discrimination

question 32

Multiple Choice

Which of the following is an example of price discrimination?

• A) Nestlé provides money-off coupons for its products.
• B) Virgin trains offers a lower price for weekend travel compared to weekday rates on the same routes.
• C) Hotel rates for members of the Automobile Association are lower than for non-members.
• D) All of the above are correct.

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Definitions:

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales activity, such as rent and salaries.

Absorption Costing

A financial accounting technique that integrates all costs incurred from manufacturing, including direct materials, direct labor, along with both fixed and variable overhead costs, into the total cost of a product.

Direct Materials

Raw materials that can be directly linked to the production of finished goods in manufacturing.

Fixed Overhead

Fixed Overhead refers to the consistent, non-variable expenses incurred by a business, regardless of its level of production or sales activities.