Carol, a farmer, sells a dozen ears of corn to her neighbor for $1/dozen. She sells a dozen ears of corn to the small market down the street for $.75/dozen. She sells corn to the chain grocery store in town for $.50/dozen. Carol is using
A)differential pricing.
B)discriminatory pricing.
C)price skimming.
D)illegal pricing.

Question

​Carol, a farmer, sells a dozen ears of corn to her neighbor for $1/dozen. She sells a dozen ears of corn to the small market down the street for $.75/dozen. She sells corn to the chain grocery store in town for $.50/dozen. Carol is using
A)​differential pricing.
B)​discriminatory pricing.
C)​price skimming.
D)​illegal pricing.

Quizplus · Accepted Answer

Carol is using differential pricing by charging different prices to different customers for the same product. She is charging her neighbor the highest price, the small market less, and the chain grocery store the lowest price. This is a common practice in the farming industry where farmers may have different types of customers with different buying power and willingness to pay.

​Carol, a Farmer, Sells a Dozen Ears of Corn to Her

Carol, a Farmer, Sells a Dozen Ears of Corn to Her