Question

When a firm charges each customer the maximum price that the customer is willing to pay, the firm:_______.a) charges the average reservation price.b) engages in first-degree price discrimination.c) engages in second-degree price discrimination.d) engages in a discrete pricing strategy.

Answer 1

The Answer is: A. engages in first-degree price discrimination.

Explanation: First degree happens when a business charges the maximum possible price for each unit of goods consumed.