​Indirect Price Discrimination Differs from Direct Price Discrimination Because

question 81

Multiple Choice

​Indirect price discrimination differs from direct price discrimination because

• A)​In indirect price discrimination high value consumers can sometimes still get the low price
• B)In direct price discrimination firms do not have to worry about cannibalizing
• C)Direct price discrimination encourages rivals to enter but indirect discrimination does not
• D)​There is no difference between the two

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Definitions:

Variable Manufacturing Overhead

Costs incurred during the production process that vary with the level of production, such as utilities for the manufacturing plant.

Direct Labor-Hours

A measure of the labor time directly involved in the production of goods or services, typically used as a basis for allocating manufacturing overhead costs.

Predetermined Overhead Rate

An estimated rate used to assign manufacturing overhead costs to products based on a certain activity (e.g., machine hours).

Variable Manufacturing Overhead

Costs of manufacturing that fluctuate with the level of production output, such as utility costs directly tied to machine operation.