Third Degree Price Discrimination Is Defined As

question 32

Multiple Choice

Third degree price discrimination is defined as:

• A) While rarely prosecuted, it is illegal and a misdemeanor versus a felony as defined by the Surface Transportation Board Act
• B) charging different prices to different firms who use the same commodity
• C) permissible only when the buyer has requested rebates
• D) the least serious type of discrimination as versus first degree

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Definitions:

Margin of Safety

The difference between actual or projected sales and the break-even point, used as a measure of risk reduction.

Contribution Margin Ratio

The percentage of sales that exceeds variable costs, showing how much revenue is available to cover fixed costs and generate profit.

Fixed Costs

Costs that remain constant regardless of a company's level of activity, including expenses like rent, salaries, and insurance.

Actual Sales

The real revenue generated from goods or services sold by a business, as opposed to projected or forecasted sales.