Price Discrimination Is Based on Observable Customer Characteristics

question 24

Multiple Choice

Price discrimination is based on observable customer characteristics:

• A) when a firm can distinguish consumers with a high versus low willingness to pay.
• B) when a firm offers a menu of alternatives, designed so that different customers will make different choices based on their willingness to pay.
• C) when a monopolist knows perfectly the customer's willingness to pay for each unit its sells and can charge a different price for each unit.
• D) in all cases.

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Definitions:

Consumers

Organisms that obtain their energy by eating other organisms or organic matter instead of producing their own food, as in the case of plants.

Digestion

The breakdown of food into smaller components that can be absorbed and utilized by the body.

Trophic Level

Trophic level pertains to the position an organism occupies in a food chain, ranging from primary producers at the base to apex predators at the top.

Carnivores

Organisms that primarily consume meat from other animals as their source of nourishment.