Which of the Following Is a Real-World Example of First-Degree

question 11

Multiple Choice

Which of the following is a real-world example of first-degree price discrimination?

• A)A pizza parlor sells large and small pizzas. Although the large pizzas are twice as big as the small pizzas, they cost less than double the price of a small pizza.
• B)An electric company sells "blocks" of power at different prices. Specifically, any customer who buys more that Q1 units of electricity can purchase additional units at a lower block price.
• C)Different prices are charged to different customers at a flea market.
• D)A movie theater charges senior citizens a cheaper price for movie tickets than it charges non-senior citizens for the same movie ticket.

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Definitions:

Plumbing Services

Professional services involved in installing, repairing, and maintaining the piping and fixtures associated with water distribution and waste water disposal.

Short Run

A period in economics during which at least one input (like capital) is fixed, focusing on immediate effects rather than long-term outcomes.

Profit-Maximizing Price

The price level at which a firm can achieve the maximum possible profit, calculated by equating marginal cost with marginal revenue.

Total Revenue

The cumulative revenue a company collects from the sale of goods or offering of services during a given time frame.