A firm practicing third-degree price discrimination may:
I. segment its customers by age, such as offering senior citizen discounts.
II. charge customers living in certain zip codes a higher price than customers living in other locations.
III. initially charge high prices and then reduce the price over time to sell to the more price-sensitive consumers.
A) II
B) I and II
C) I
D) I, II, and III

Question

Quizplus · Accepted Answer

Third-degree price discrimination involves segmenting consumers based on identifiable characteristics (like age or location) and charging different prices to different segments. It also includes time-based pricing strategies, where prices are adjusted over time to target different consumer groups, such as charging higher prices initially and then lowering them to attract more price-sensitive consumers.

A Firm Practicing Third-Degree Price Discrimination May