A firm engaging in group price discrimination
A)divides customers into groups and then charges each customer within each group a different price, similar to perfect price discrimination.
B)divides customers into groups and then charges each group a different price.
C)bundles products into groups and sells the groups at different prices.
D)finds the average reservation price for a group of customers and sell its goods at that price.

Question

Quizplus · Accepted Answer

Group price discrimination involves dividing customers into groups and charging each group a different price. This is different from perfect price discrimination where each customer is charged a different price based on their willingness to pay. It is also different from bundling where products are sold as a package deal at a discounted price. Finally, finding the average reservation price for a group of customers and selling goods at that price is not a form of group price discrimination.

A Firm Engaging in Group Price Discrimination