In general successful second degree price discrimination requires the firm to know more information about consumers...

In general successful second degree price discrimination requires the firm to know more information about consumers than successful first degree price discrimination. True/False. Give your selection and a very brief explanation.

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False. In a second degree price discrimination, seller charges different prices for different quantities of a product and price varies according to quantity demanded and the second degree price discrimination needs less information about consumers preferences.Examples: quantity discounts, when more units are sold at a lower per-unit price; and block-pricing etc. Whereas in a first degree price discrimination, to obtain the highest revenue, the seller must know the absolute maximum price that every consumer is willing to pay. Hence,the first degree price discrimination requires the firm to know more information on all of its customers.To achieve the successful first degree price discrimination, a firm should have full information on every consumer's individual preferences and willingness to pay. Therefore, successful first degree price discrimination requires the firm to know more information about consumers than successful second degree price discrimination.

Rahul Sunny answered 1 year ago

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