When state universities charge higher tuition fees to out-of-state students than to local students,the universities are practicing
A)first-degree discrimination.
B)second-degree discrimination.
C)third-degree discrimination.
D)fourth-degree discrimination.

Question

Quizplus · Accepted Answer

Third-degree discrimination involves charging different prices to different groups of consumers based on their level of sensitivity or responsiveness to price. In this case, out-of-state students are charged more because they are less sensitive to tuition price than local students who may have limited options for attending college in their home state. This type of price discrimination is often used by state universities to subsidize tuition for local students and to attract students from out of state who are willing to pay a higher price for the opportunity to attend a state university.

When State Universities Charge Higher Tuition Fees to Out-Of-State Students