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3 June, 08:11

Charging higher prices to residential customers than to industrial customers is an example of A. perfect price discrimination. B. first-degree price discrimination. C. third-degree price discrimination. D. second-degree price discrimination. E. quantity price discrimination.

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  1. 3 June, 10:02
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    Answer: Option (C) is correct.

    Explanation:

    Correct Option: Third-degree price discrimination.

    When the different price is charged for every unit of consumption is called as first-degree price discrimination. It is also known as perfect price discrimination. In this type of discrimination, seller charge prices according to the consumers willingness to pay.

    In second-degree price discrimination, different price is charged for different quantity of goods.

    In third-degree price discrimination, different price is charged from different groups but the same price will be charged within the group. For example: the caste categories, SC, ST, OBC and general; here different fees is charged from different category.

    In our question, Charging higher prices to residential customers than to industrial customers is an example of third-degree price discrimination.
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