Which of the Following Is an Example of Price Discrimination

question 45

Multiple Choice

Which of the following is an example of price discrimination?

• A) Firm A sells its output for less than Firm B.
• B) Firm C doubles the price of its output given a large increase in market demand.
• C) Firm D is the only seller of a product.
• D) Firm E gives senior citizens a 10% discount.

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Definitions:

Equilibrium World Price

The price of an internationally traded product that equates the quantity of the product demanded by importers with the quantity of the product supplied by exporters; the price determined at the intersection of the export supply curve and the import demand curve.

Exports Supplied

Goods or services provided by one country to another in exchange for payment or trade.

Imports Demanded

The total quantity of goods and services that consumers in a country wish to purchase from abroad at a given price level.

Import Quotas

Government-imposed limits on the quantity or value of goods that can be imported into a country.