Which of the following quotes by a store manager describes price discrimination in action?
A)"Since bulk goods are cheaper to package,I can offer a lower price."
B)"I can get a 4-litre jug of milk from the supplier for less than four 1-litre cartons,so I can sell it for less per litre."
C)"We offer our employees a 10 percent price discount."
D)"I offer discounts if you buy 12 apple juice cartons in one box,although it costs me the same as if I split it up and sell them separately."
E)"We set price equal to average variable cost."

Question

Quizplus · Accepted Answer

Choice D describes price discrimination as the store manager is offering different prices based on the quantity bought, even though the cost to the store is the same. This is an example of quantity discrimination, a form of price discrimination. The other choices do not involve price discrimination, but instead relate to cost-based pricing (A and E), volume discounts (B), and employee discounts (C).

Which of the Following Quotes by a Store Manager Describes