Which of the following would be considered an example of a second-degree price discrimination strategy?
A) Variable pricing
B) Leader pricing
C) Contribution pricing
D) Break-even pricing
E) All of these are examples of a second-degree price discrimination strategy.

Question

Quizplus · Accepted Answer

Variable pricing, also known as peak-load pricing or time-of-day pricing, is an example of second-degree price discrimination where different prices are charged based on the demand at different times of the day or different seasons. This strategy is used to maximize revenue by charging higher prices during peak demand periods and lower prices during off-peak periods. Leader pricing is a form of promotional pricing where a product is sold at a low price to attract customers into a store. Contribution pricing involves pricing a product based on its variable costs to ensure that it generates a minimum contribution towards fixed costs and profits. Break-even pricing involves pricing a product at a level that ensures that total revenue equals total costs. These pricing strategies are not examples of second-degree price discrimination. Therefore, the correct answer is A.

Which of the Following Would Be Considered an Example of a Second-Degree