Which of the Following Is an Example of Price Discrimination

question 466

Multiple Choice

Which of the following is an example of price discrimination?

• A)An online bookstore charges more for overnight shipping than standard shipping when customers buy books from it.
• B)Airline tickets are more expensive for first-class seats than for coach.
• C)Hotel rates for AAA members are lower than for nonmembers.
• D)All of the above are correct.

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Definitions:

Sharpe Measure

A ratio used to evaluate the risk-adjusted return of an investment, calculated by subtracting the risk-free rate from the return of the investment and dividing by the investment's standard deviation.

Excess Returns

Returns on an investment that exceed the benchmark or risk-free return, often used as a measure of the performance of investment managers.

Risk-free Asset

An investment that is expected to deliver its promised returns without any risk of financial loss, typically associated with government bonds.

Risk Premium

The additional return expected by an investor for taking on a higher level of risk compared to a risk-free investment.