Versioning is a form of _____ price discrimination because _____.
A) first-degree; the firm can identify its customers' types of demand curves before they buy, allowing the firm to select the profit-maximizing version of the product
B) second-degree; the firm cannot identify its customers' types of demand curves before they buy, so the firm produces various versions of the product in hopes that customers will self-select the appropriate product
C) perfect; each customer buys a unique version of the product that is priced to eliminate all consumer surplus
D) third-degree; the firm can directly determine which customers should buy which version of the product before the sale is made

Question

Quizplus · Accepted Answer

Versioning is a form of second-degree price discrimination because the firm cannot perfectly identify each customer's willingness to pay in advance. Instead, by offering different versions of a product (e.g., basic vs. premium), the firm allows customers to self-select based on their own preferences and willingness to pay, without needing to know each customer's demand curve beforehand.

Versioning Is a Form of _____ Price Discrimination Because _____

Versioning Is a Form of _ Price Discrimination Because _