Your local corner store charges more for a four-litre jug of milk than the local Walmart. What is this an example of?
A) price discrimination
B) predatory pricing
C) decreasing returns to scale
D) location differentiation

Question

Quizplus · Accepted Answer

This is an example of location differentiation, where the corner store charges more due to the convenience factor of being closer to the customers, compared to the larger Walmart which can benefit from economies of scale and charge less. It is not an example of price discrimination or predatory pricing, and there is no mention of decreasing returns to scale.

Your Local Corner Store Charges More for a Four-Litre Jug