Asked by Li-Yun Chang on Jun 01, 2024
Verified
Some grocery stores are now offering customers coupons which entitle them to a discount on certain items on their next visit when they go through the check-out line. This practice is an example of:
A) intertemporal price discrimination.
B) third-degree price discrimination.
C) a two-part tariff.
D) bundling.
E) none of the above
Intertemporal Price Discrimination
Practice of separating consumers with different demand functions into different groups by charging different prices at different points in time.
Coupons
Vouchers or codes that offer a discount on the purchase price of goods or services, usually issued by manufacturers or retailers to stimulate demand.
Two-part Tariff
A pricing strategy that involves a fixed charge plus a variable usage rate.
- Ascertain the situations prompting businesses to implement diverse price discrimination strategies.
- Comprehend the approaches businesses utilize to acquire consumer surplus through pricing schemes.
Verified Answer
ZK
Zybrea KnightJun 02, 2024
Final Answer :
B
Explanation :
This is an example of third-degree price discrimination, as the grocery store is offering different prices (discounts) to different groups of customers (those with coupons).
Learning Objectives
- Ascertain the situations prompting businesses to implement diverse price discrimination strategies.
- Comprehend the approaches businesses utilize to acquire consumer surplus through pricing schemes.