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STIHL, Inc. manufactures gasoline-powered chain saws for professional, commercial, farm, and consumer markets. To "better serve" their customers, STIHL offers its chain saws in four different quality lines and associated price ranges: occasional use, mid-range, professional, and arborist. Under what circumstances could offering multiple qualities of a product be price discrimination? What form of price discrimination might this represent?

Answer If the quality of the saws is different for each group. It would be second degree price discrimination.
If the quality of the saws is different for each group. It would be first degree price discrimination.
If the quality of the saws is the same for each group. It would be first degree price discrimination.
It would never be considered price discrimination because the customers have different uses for the products.
If the quality of the saws is the same for each group. It would be third degree price discrimination.

Microeconomics, Economics

  • Category:- Microeconomics
  • Reference No.:- M975961

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