Price discrimination through group pricing works when the basis for segmenting the consumers is _____, is _____, and separates consumers based on their _____.
A)secret; hard to change; costs
B)verifiable; hard to change; reservation price for the product
C)open; easy to change; marginal costs
D)verifiable; easy to change; flexibility in demand for the product

Question

Quizplus · Accepted Answer

Group pricing can effectively discriminate prices among consumers when the basis for segmenting the consumers is verifiable, meaning it can be confirmed by the seller, hard to change, meaning the consumer cannot easily switch to another segment, and separates consumers based on their reservation price for the product, meaning the maximum price they are willing to pay. Therefore, option B is the best choice as it includes all three criteria.

Price Discrimination Through Group Pricing Works When the Basis for Segmenting