Which of the Following Is an Example for Group Price

question 6

Multiple Choice

Which of the following is an example for group price discrimination?

• A) a BMW selling for more than a VW
• B) local residents receiving a discount at the local golf course
• C) the fact that a razor is cheap and blades are expensive
• D) a hotel charging more for a room if the customers bring pets

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Definitions:

Income Tax

A tax levied by a government directly on income, especially an annual tax on personal income.

Horizontal Equity

The principle that individuals in similar financial conditions should be treated equally by the taxation system.

Vertical Equity

A principle in taxation that states taxpayers with a greater ability to pay should contribute more in taxes.

Regressive Tax

A tax for which high-income taxpayers pay a smaller fraction of their income than do low-income taxpayers.