Question

Second-degree price discrimination is the practice of charging:

A. different prices for different quantity blocks of the same good or service.
B. each customer the maximum price that he or she is willing to pay.
C. the reservation price to each customer.
D. different groups of customers different prices for the same products.

Answer 1

A. different prices for different quantity blocks of the same good or service.

Step-by-step explanation:

Second-degree price discrimination refers to the practice by traders of charging different prices for different quantities of the same product. In this price discrimination, the seller does not have much information about the buyer. Sellers apply the diminishing marginal utility law to entice buyers to buy more.

Examples of second-degree price discrimination include quantity discounts where traders offer reduced prices for bulk purchases. Block-pricing is second-degree price discrimination because buying price varies with different 'blocks' of the same product