Final answer:
Offering the same item to different customers at different prices is known as price discrimination. It maximizes business profits by varying prices based on consumer characteristics, unlike bundling which combines products for a discount.
Step-by-step explanation:
Offering the same item to different customers at different prices is called price discrimination. This practice allows businesses to maximize profits by charging customers different prices based on their willingness to pay, demand elasticity, or other factors such as location, age, or purchase history. It differs from bundling, where firms offer multiple products or services at a combined price, which often provides a discount compared to purchasing each item separately. Additionally, in markets with a variety of products such as clothing or food, this variety leads to product differentiation and can result in monopolistic competition, where businesses might have incentives to reduce discriminatory pricing to remain competitive.