Which of the Following Scenarios Demonstrates Price Discrimination

question 23

Multiple Choice

Which of the following scenarios demonstrates price discrimination?

• A) Bananas at the grocery store are sold for $0.69 per pound.
• B) Tickets to a play are sold for $15 for students and $25 for adults.
• C) General admission concert tickets are sold for $40.
• D) Strawberries are sold for $2.00 per quart in the early summer and $5.00 per quart in the winter.

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Definitions:

Capital Budgeting

The process by which investors or company management evaluate and select long-term investments that are likely to yield positive returns.

Long-Term Effects

The lasting outcomes or impacts that result from a specific action or event, considered over an extended period of time.

Short-Duration

Describes investments or financial instruments that have a short time until maturity, typically less than one year.

Net Present Value (NPV)

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to assess the profitability of an investment or project.