An Example of First-Degree Price Discrimination Would Occur

question 57

Multiple Choice

An example of first-degree price discrimination would occur:

• A)if a sales agent illegally sold a commodity to a federal agent above the competitive market price.
• B)when you sell something illegally to an individual through the mail.
• C)if a car salesman could accurately guess the maximum amount each customer would be willing to pay for a vehicle and charge him/her that price.
• D)when you order 12 of something online and you pay less per unit than if you had bought only one.

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Definitions:

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary by income level, type of income, or legal entity.

CCA Tax Shield

A deduction that Canadian businesses can claim for the depreciation of tangible property, reducing taxable income.

After-Tax Annual Lease Payment

The amount of lease payments due each year after accounting for the tax effects.

After-Tax Discount Rate

The discount rate after adjusting for taxes, used to evaluate investments and their future cash flows after tax implications.