Consumers often seek bargains by purchasing goods in large quantities; for example, buying in bulk at Costco or buying larger boxes of cereal so the price per ounce is lower. These purchasing strategies result in which form of price discrimination? a) first-degree price discrimination b) second-degree price discrimination c) fourth-degree price discrimination d) third-degree price discrimination

Question

Business

Ashlee Lyons

10 July, 01:44

Consumers often seek bargains by purchasing goods in large quantities; for example, buying in bulk at Costco or buying larger boxes of cereal so the price per ounce is lower. These purchasing strategies result in which form of price discrimination? a) first-degree price discrimination b) second-degree price discrimination c) fourth-degree price discrimination d) third-degree price discrimination

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Conductor · Answer 1

The correct answer is the option B: second-degree price discrimination.

Explanation:

To begin with, the term of price discrimination, in marketing and economics, refers to the action of charge different prices to different consumers for the same product that do not vary in quality. This concept states fourth differents degrees in order to use the most beneficial strategy to one's company.

To continue, the second-degree price discrimination establishes that companies price products differently based on the preferences of various groups of consumers and furthermore it is very common to apply this type of discrimination through quantity discounts and to add an example, is very common to use this strategy in warehouse retailers such as Costco.