Use the Following to Answer Question

question 51

Multiple Choice

Use the following to answer question:
Figure 10.6
-(Figure 10.6) Little Pinehurst Miniature Golf has two types of customers: infrequent players and frequent players. Using a strategy of second-degree price discrimination, Little Pinehurst offers customers the choice of paying $15 per round of miniature golf or $12 per round for a package of 16 rounds. The pricing scheme is _____ for infrequent players but is _____ for frequent players.

• A) incentive-compatible; not incentive-compatible
• B) not incentive-compatible; not incentive-compatible
• C) not incentive-compatible; incentive-compatible
• D) incentive-compatible; incentive-compatible

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Definitions:

Condensed Income Statement

A simplified financial statement summarizing a company's revenues, expenses, and net income, without detailed line items.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and losses from total revenue.

Gross Profit

The difference between revenue and the cost of goods sold before deducting any selling, administrative, or other expenses.

Periodic Inventory System

An inventory system where inventory levels are updated at specific intervals rather than continuously, often requiring physical counts.