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What is true about second degree price discrimination (SDPD)?

 
 
 
 

This is true. As discussed in the lecture these two pricing methods can be considered as types of SDPD.

 
 
 

This is true. Firms create some deals or different purchasing options from which the customers can choose from. With this offer customers choose the deal that best fits their preferences and willingness to pay. Hence, firms do not need to know consumers’ characteristics and preferences.

 
 

This is true. If firms can partially observe consumers’ willingness to pay (e.g. willingness to pay of certain customer groups) then the firms can offer deals which can help distinguish the consumers (by consumers’ selection).

 
 

This is correct. Firms create some deals or different purchasing options from which the customers can choose from. With this offer customers simply get the deal that best fits their preferences and willingness to pay.

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