Which of the Following Firms Are Examples of Price Discrimination

question 60

Multiple Choice

Which of the following firms are examples of price discrimination?

• A)United Airlines charges customers who book 14 days ahead a lower price than those who donʹt.
• B)Chevron gas stations charges customers 20 cents more per gallon if they choose the premium grade over the regular unleaded.
• C)The local carwash charges drivers of minivans and large SUVʹs a $2.00 ʺlarge vehicleʺ surcharge.
• D)GEICO, an insurance company, charges higher rates to those who received more than one speeding ticket in the last 6 months.

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Definitions:

General Adaptation Syndrome

A three-stage process that describes the physiological changes the body goes through when under stress: alarm, resistance, and exhaustion.

Alarm Reaction

The first stage of the GAS, which is triggered by the impact of a stressor and characterized by sympathetic activity.

Exhaustion Stage

The final phase of the stress response, as described by Hans Selye, characterized by depleted physical and mental resources, leading to burnout or health issues.

Resistance Stage

The second phase of the General Adaptation Syndrome, where the body mobilizes its defenses to cope with a stressor.