As a company manager, what do you need to know about your customers before you can successfully price discriminate?
A)You need to know your own costs.
B)You need to know that the product is a tangible good rather than a service.
C)You need to know how long each customer has been buying the product.
D)You need to know each customer's reservation price.

Question

Quizplus · Accepted Answer

To successfully price discriminate, a company manager needs to know the reservation price of each customer, which is the maximum price a customer is willing to pay for a product or service. This allows the manager to charge a different price to each customer group based on their willingness to pay, maximizing profit. Knowledge of the company's costs, whether the product is a tangible good or a service, and the duration of customers' buying histories may also be important, but not essential to successful price discrimination.

As a Company Manager, What Do You Need to Know