Pizza producers charge one price for a single pizza and almost give away a second one.This is an example of
A) monopoly.
B) a barrier to entry.
C) behavior that is not profit-maximizing.
D) price discrimination.
E) rent seeking.

Question

Quizplus · Accepted Answer

This is an example of price discrimination, specifically second-degree price discrimination, where the producer charges different prices for different quantities of the same product. By charging a regular price for the first pizza and a lower price for the second, the producer is able to attract more customers who value the deal, and also capture more value from those who are willing to pay more for a single pizza. This strategy can increase profits, as long as the incremental cost of producing the second pizza is low enough to offset the lower price.

Pizza Producers Charge One Price for a Single Pizza and Almost