In the context of economics, what is price discrimination?
Setting different prices for the same product based on production costs
Charging different prices to different customers for the same good or service
Establishing fixed prices for all customers
Adjusting prices based on inflation rates
#2
Which of the following is a potential benefit of price discrimination for a firm?
Increased consumer welfare
Higher average revenue
Perfect price equality
Reduced market share
#3
Which type of price discrimination involves charging different prices based on the quantity purchased by a customer?
First-degree price discrimination
Second-degree price discrimination
Third-degree price discrimination
Quantity discrimination
#4
What is the primary motivation for a firm to engage in price discrimination?
To ensure perfect price equality
To maximize consumer surplus
To capture as much consumer surplus as possible
To minimize revenue
#5
Which of the following is a common type of price discrimination?
Perfect competition
Monopolistic competition
First-degree price discrimination
Oligopoly
#6
What is the primary goal of profit maximization for a firm engaging in price discrimination?
Maximizing revenue
Maximizing market share
Minimizing production costs
Maximizing total profit
#7
What is an example of third-degree price discrimination in the real world?
Student discounts on public transportation
Dynamic pricing for airline tickets
Fixed pricing for all online customers
Government-regulated pricing for essential goods
#8
Why might a firm engage in first-degree price discrimination?
To target different market segments
To increase consumer surplus
To capture all consumer surplus
To maintain a competitive market
#9
Which condition must be met for successful price discrimination to occur?
Perfect competition
Different elasticities of demand among customer groups
Monopoly
Government price controls
#10
What is the term used to describe the price discrimination strategy where a company charges the highest price to consumers who are willing to pay more?
Third-degree price discrimination
Second-degree price discrimination
Peak-load pricing
Penetration pricing
#11
What is an essential condition for successful second-degree price discrimination?
Perfect competition
Identical demand curves
Monopoly
Different production costs
#12
In the context of price discrimination, what does the term 'arbitrage' refer to?