Asked by Taylor Spence on Sep 24, 2024
Indirect price discrimination differs from direct price discrimination because
A) In indirect price discrimination high value consumers can sometimes still get the low price
B) In direct price discrimination firms do not have to worry about cannibalizing
C) Direct price discrimination encourages rivals to enter but indirect discrimination does not
D) There is no difference between the two
Indirect Price Discrimination
A pricing strategy where different prices are charged for the same product or service based on characteristics other than the customer's willingness to pay.
Direct Price Discrimination
The practice of charging different prices to different consumers for the same product or service, based directly on the willingness to pay of each customer.
Cannibalizing
In business, the reduction in sales of a product due to the introduction of a similar product by the same company.
- Differentiate between direct and indirect price discrimination.
Learning Objectives
- Differentiate between direct and indirect price discrimination.
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