The Strategy Underlying Price Discrimination Is To

question 18

Multiple Choice

The strategy underlying price discrimination is to:

• A) charge higher prices to customers who have better access to substitutes.
• B) charge everyone the same price but limit the quantity they are allowed to buy.
• C) increase total revenue by charging higher prices to those with the most inelastic demand for the product and lower prices to those with the most elastic demand.
• D) reduce per-unit costs by charging higher prices to those with the most elastic demand and lower prices to those with the most inelastic demand.

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Definitions:

Adaptation Threshold

The limit to which an organism or a system can adapt to changes in conditions or stimuli.

Difference Threshold

The smallest amount of change in a stimulus that can be detected as different from the original stimulus.

Subliminal Threshold

The level below which a stimulus is not consciously detected but can still influence thoughts, feelings, or actions.

Stimulation

The action of arousing interest, excitement, or activity in someone or something.