Question

If Big​ Fitness, a large workout​ facility, offers a discounted membership to college​ students, this is...

If Big​ Fitness, a large workout​ facility, offers a discounted membership to college​ students, this is an example of​ ________.

A.

third−degree

price discrimination

B.

zero−degree

price discrimination

C.

first−degree

price discrimination

D.

second−degree

price discrimination

Homework Answers

Answer #1

If we talk in simple terms then 1st degree price discrimination or perfect price discrimination occurs when the company charges maximum possible price from each consumer

it also causes zero consumer surplus

second degree price discrimination is occurs with quantity

third degree price discrimination related with the demographics like senior ,students, military Personal etc

Now from the given question since big fitness offers discount to a special segment of customer that is student so it will come under third degree price discrimination.

answer is option A

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