____ is an example of Perfect Price Discrimination (First Degree) Auction sites
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Question
____ is an example of Perfect Price Discrimination (First Degree)
Auction sites such as EBay where the buyer could put his maximum reservation price.
The regular membership price for the Metropolitan Museum of Art in NYC (Met) is $55, and the Students Discount price is only $45.
The pharmaceutical company, GlaxoSmithKline, charged different prices for its Aids drugs in different markets. In developed countries, the price is approximately $10,000 per patient per year, and in Africa, the price is $1,000 per person per year.
In the Publisher License Agreement contract signed between Microsoft and other game publishers, Microsoft offers quantity discount to its game publisher. If the publisher's order quantity is between 0 to 10,000 units, the price would be $20 per unit; if the publisher's order falls between 10,001 and 25,000 units, the price becomes $18 per unit; if the publisher could order more than 25,000 units, the price drops to $15 per unit.
Explanation / Answer
Perfect Price Discrimination charges the consumer maximum price which a consumer is willing to pay as to extract the maximum consumer surplus. This price is negotiable. Example is a car dealership company to tries to sell cars at maximum price possible. Hence, the example of Perfect Price Discrimination (First Degree) is Auction sites such as EBay where the buyer could put his maximum reservation price.
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