24It is frequently observed that when a city is located next

24It is frequently observed that when a city is located next to a major highway, gas stations located close to the highway charge higher prices than gas stations located farther away. This is an example of:

first-degree price discrimination.

second-degree price discrimination.

third-degree price discrimination.

illegal price discrimination.

25\"Personalized pricing\" and \"group pricing\" are examples of:

first-degree and second-degree price discrimination, respectively.

second-degree and third-degree price discrimination, respectively.

first-degree price discrimination.

first-degree and third-degree price discrimination, respectively.

26Which of the following is an example of price discrimination?

Increasing the price of a product when demand for the product increases.

Charging different prices for a product in different regions of the country due to differences in transportation costs.

Bundling complementary products to attract additional sales.

Reducing the price of a product to reduce excess inventory.

27Promotional pricing would best be categorized as a form of:

first-degree price discrimination.

second-degree price discrimination.

third-degree price discrimination.

no price discrimination.

Solution

24)

Third-degree price discrimination is when markets are divided into segments and different prices are charged for each segment. In this gas, distance is the parameter to segment the market and charge different prices.

the correct option is (C)

25)

Personalized pricing is one to one pricing means charging different prices to each customer. It is also called first-degree price discrimination whereas group pricing is the kind of price discrimination in which prices varies based on segmenting the market.

the correct option is (d)

26)

Price discrimination is a pricing strategy where similar goods and services are exchanged for different prices in different markets. Reducing prices to sell excess inventories is also an example of price discrimination.

the correct option is (D)

27)

Promotional pricing or product versioning is a second-degree price discrimination.

the correct option is (B)