20. How many type of price discriminations are there? A. 1 B. 3 C. 2 D. 4
In commerce there are three types of price discrimination that exist. The exact price discrimination method that is used depends on the factors within the particular market. First degree price discrimination: the monopoly seller of a good or service must know the absolute maximum price that every consumer is willing to pay and can charge each customer that exact amount. This allows the seller to obtain the highest revenue possible. Second degree price discrimination: the price of a good or service varies according to the quantity demanded. Larger quantities are available at a lower price (higher discounts are given to consumers who buy a good in bulk quantities). Third degree price discrimination: the price varies according to consumer attributes such as age, sex, location, and economic status.
