Question

Janie, a farmer, sells a dozen ears of corn to her neighbor for $1/dozen. She sells a dozen ears of corn to the small market down the street for $.75/dozen. She sells corn to the chain grocery store in town for $.50/dozen. Janie is using
a) differential pricing
b) discriminatory pricing
c) price skimming
d) illegal pricing

Answer 1

Answer:

The answer is A.

Explanation:

Differential pricing is the process of charging different prices for the same product to different customers.

The main aim for employing this strategy is to maximize profit.

Differential pricing strategy can be base on:

Time pricing (for example if the product is seasonal)

Location pricing(for example, the price of a product at a supermarket might be different from a home retailer)

Customer segment pricing