Which of the following is (are) price discrimination? i. Charging different prices based on differences in production costs.
Ii) Charging business flyers a higher airfare than tourists.
Iii) Charging more for the first pizza than the second.
A) i only
B) ii and iii
C) i and iii
D) ii only
E) i, ii and iii

Question

Quizplus · Accepted Answer

Price discrimination is the practice of charging different prices to different groups of consumers for the same product or service.

i) Charging different prices based on differences in production costs is not price discrimination because it is based on actual differences in costs.

ii) Charging business flyers a higher airfare than tourists is an example of price discrimination based on the consumer's ability to pay.

iii) Charging more for the first pizza than the second is an example of price discrimination based on the quantity purchased.

Therefore, only ii and iii are examples of price discrimination.

Which of the Following Is (Are) Price Discrimination? I