Question

Charging a higher price for a motel room to customers with dogs or cats than to customers with no pets is most likely an example of A. thirdminusdegree price discrimination. B. firstminusdegree price discrimination. C. secondminusdegree price discrimination. D. actual cost differences.

Answer 1

Answer:

The correct answer is D.

Explanation:

Price discrimination is a selling strategy under which the same producer charges different prices for the same or similar product. Price discrimination ca be classified into three types,

1. First-degree price discrimination  
2. Second-degree price discrimination, and
3. Third-degree price discrimination

Room for cats and dogs require different services than other rooms. Here, these two products are not the same or similar. So, here the difference in prices cannot be referred to as price discrimination. Prices here are different because of the difference in the cost of the products.