Which of the following is the closest example of perfect price discrimination?
A)An airline providing discounts to its frequent-flyers as they fly more
B)At an auction of antique furniture,each piece of furniture is sold to the highest bidder
C)A golf-club imposing a very high entry fee to reduce membership requests
D)An electric utility charging higher rates to the customers in the summer season than in the winter season

Question

Quizplus · Accepted Answer

Perfect price discrimination occurs when a seller charges each customer the maximum price they are willing to pay for a product or service, resulting in producer surplus being maximized. In an auction, each item is sold to the highest bidder, who is willing to pay the most for it, which is the closest example of perfect price discrimination. The other choices are not perfect price discrimination since they are either based on grouping customers into segments or charging different prices based on time, which means that different customers are not charged the same price for the same product.

Which of the Following Is the Closest Example of Perfect