An example of first-degree price discrimination would occur:
A)if a sales agent illegally sold a commodity to a federal agent above the competitive market price.
B)when you sell something illegally to an individual through the mail.
C)if a car salesman could accurately guess the maximum amount each customer would be willing to pay for a vehicle and charge him/her that price.
D)when you order 12 of something online and you pay less per unit than if you had bought only one.

Question

Quizplus · Accepted Answer

First-degree price discrimination, also known as perfect price discrimination, involves charging each individual customer their maximum willingness to pay. In this scenario, the car salesman is able to accurately guess the maximum amount each customer is willing to pay and charges them that price, which is an example of first-degree price discrimination. The other answer choices do not involve first-degree price discrimination. First-degree price discrimination, also known as perfect price discrimination, occurs when a seller charges each customer their maximum willingness to pay for a product or service. In this scenario, the car salesman is able to accurately determine the maximum amount each customer is willing to pay and charges them that price, which is an example of first-degree price discrimination. The other options involve illegal or unethical practices, which are not examples of price discrimination.

An Example of First-Degree Price Discrimination Would Occur