Third-degree price discrimination exists whenever:
a. the seller knows exactly how much each potential customer is willing to pay and will charge accordingly.
b. different prices are charged by blocks of services.
c. the seller can separate markets by geography, income, age, etc., and charge different prices to these different groups.
d. the seller will bargain with buyers in each of the markets to obtain the best possible price.
c
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Two key consequences of asymmetric information are adverse selection and moral hazard. Define each concept, provide one example of each, and explain how the two concepts differ
What will be an ideal response?
Doctors have ________ incentive to control their costs when consumers ________ for a visit to the doctor's office
A) more; only pay a deductible B) less; only pay a deductible C) less; pay entirely out of pocket D) more; have a third-party payer that pays