When firms charge different prices to different customer groups for the same product or service, it is a case of second-degree price discrimination.

Question

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This scenario describes third-degree price discrimination, where firms charge different prices to different customer groups based on attributes like age, location, or income, rather than on the quantity consumed or the version of the product. Second-degree price discrimination involves charging different prices based on the quantity consumed or the version of the product purchased, without regard to the identity of the buyer.

When Firms Charge Different Prices to Different Customer Groups for the Same