Suppose that your school pays one rate for the first one million kilowatts of electricity and a lower rate for any power it uses over one million kilowatts. What economic concept is occurring here?
A)perfect price discrimination
B)second-degree price discrimination
C)third-degree price discrimination
D)economies of scale

Question

Quizplus · Accepted Answer

This scenario is an example of second-degree price discrimination, where prices vary according to the quantity consumed or purchased. The school pays one rate for the first one million kilowatts and a lower rate for consumption above that threshold, which is a form of price discrimination based on the volume of purchase.

Suppose That Your School Pays One Rate for the First