Which Is the Best Example of Price Discrimination

question 174

Multiple Choice

Which is the best example of price discrimination?

• A) an airline company charging lower fares per pound for air freight than for passengers
• B) a telephone company charging lower rates to weekend users than weekday users
• C) a supermarket charging lower prices in its city stores than its out-of-the-way rural store
• D) a private doctor charging higher fees to patients receiving special services than patients receiving regular services

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Definitions:

Capital Lease

A contractual arrangement that transfers substantially all the benefits and risks of ownership to the lessee so that the lease is in effect a purchase of the property.

Plant Assets

Long-term tangible assets used in the operation of a business, such as buildings, machinery, and equipment.

Loss On Redemption

A financial loss experienced when redeeming bonds or securities before their maturity date for a price higher than their face value.

Carrying Value

The book value of an asset or liability on a company's balance sheet, calculated as its original cost minus any depreciation, amortization, or impairment costs.