Which of the following is an example of perfect price discrimination?
A)A tattoo parlor charges a client's reservation price net of MC.
B)A club charges a member's reservation price for entry and MC for service.
C)A competitive firm charges a price equal to marginal cost.
D)A seamstress charges a client's reservation price.

Question

Quizplus · Accepted Answer

Perfect price discrimination occurs when a seller charges each buyer their individual reservation price, which is the maximum amount they are willing to pay for a good or service. In this scenario, the seamstress is charging each client their reservation price, resulting in perfect price discrimination. The other options involve charging either a uniform price or a member's reservation price, but not individual reservation prices for each buyer.

Which of the Following Is an Example of Perfect Price