1st Degree
Explain what First Degree Price Discrimination is in your own words
When a business charges the maximum amount every consumer is willing to charge.
Does this degree reward, or punish consumers?
(reward)
Name 2 companies that practice 3rd degree price discrimination
Air Canada, Park Royal Cineplex: 3000 Park Royal S, West Vancouver, BC V7T 2W4
You're chilling on eBay and you are bidding on a worn Mr. Perrin rugby jersey from his days at Handsworth; however, you did not end up purchasing the jersey because someone outbids you. $750
First degree
Explain why companies use price discrimination
profit maximization
(true or false)
True
Explain what Second Degree Price Discrimination is in your own words
when consumers recieve discounts on multiple purchases
Explain what Third Degree Price Discrimination is in your own words
3rd Degree price discrimination occurs when a business charges different prices for different consumer groups based on their characteristics.
Buying an item at a discounted price because a lot of product is bought is an example of which degree?
2st degree
Price discrimination causes no consumer surplus.
(True or false)
true
Explain a situation that includes first degree price discrimination
...
Explain a situation that includes second-degree price discrimination
......
Explain a situation where the Third Degree of Price Discrimination would occur
Different prices for different groups
Market segmentation
You are in a foreign country, shopping at a local flea market. The local kiosk sees that you are clearly not a citizen and possess little knowledge of the local market, so they upcharge you. And you pay the price.
Third degree
Name an advantage and disadvantage of using price discrimination
advantages: reduced costs for most customers
disadvantages: prices can be too high, unfair at times, no consumer surplus
What does 1st degree price discrimination rely on, out of the consumers, in order to be successful.
Price discrimination 1st degree relies on the ignorance of the consumers.
Explain why a company would choose to participate in second-degree price discrimination
With this type of discrimination, companies can encourage consumers to purchase large quantities by offering quantity discounts.
Explain some of the negative social implications that the Third Degree of Price Discrimination holds
Racism, Sexism, Ableism, etc.
You are with your stereotypical rich friend who buys super expensive deluxe chips; they let you try a chip. You realize that they taste the same as the value bag that you buy.
What degree of price discrimination has occurred?
First Degree
Name two conditions necessary for price discrimination to take place.
a firm's monopoly, market segmentation, different elasticities of demand, and arbitrage