Consider the following actions undertaken by a firm:
a.charging the same price for products of different quality
b.charging different prices to different consumers for the same product when the variation cannot be explained by cost differences
c.charging different prices for products of different qualities
d.charging a lower price to match a competitor's price
The actions that will be considered price discrimination are
A)a, b, c, and d
B)a, b, and d only
C)b and d only
D)a and b only

Question

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different consumers for the same product when those differences cannot be explained by cost variations (b), or charging the same price for products of different quality (a), which can also be seen as a form of unfair pricing strategy. Charging different prices for products of different qualities (c) is a standard business practice based on product differentiation, and charging a lower price to match a competitor's price (d) is a competitive strategy, not price discrimination.

Consider the Following Actions Undertaken by a Firm