A popular restaurant chain,Grill n' Chill,offers its customers a 0.5% discount on a bill of $100-$200,a 1% discount on a bill of $201-$300,a 1.5% discount on a bill of $301-$400,and so on.Thus,customers enjoy a higher discount when they order more food.Which of the following forms of price discrimination is being practiced by this restaurant chain?

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Quizplus · Accepted Answer

This is an example of second-degree price discrimination, where the price varies according to the quantity purchased. The more the customer orders, the higher the discount they receive. Third-degree price discrimination is when prices vary according to different customer groups, such as age or income level. First-degree price discrimination is when a seller charges each customer their maximum willingness to pay, which is difficult to implement in practice. Intertemporal price discrimination is when the seller charges a different price depending on the time of purchase, such as offering lower prices during off-peak hours.

A Popular Restaurant Chain,Grill N' Chill,offers Its Customers a 0