📚 Learning Guide
Understanding Price Discrimination
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Which of the following best describes the legal considerations surrounding second-degree price discrimination in the context of consumer rights?

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Choose the Best Answer

A

It is always illegal regardless of the situation.

B

It is allowed as long as it does not harm competition.

C

It is only applicable in government-regulated industries.

D

It must involve significant differences in product quality.

Understanding the Answer

Let's break down why this is correct

Answer

Second-degree price discrimination happens when a company charges different prices for the same product based on how much of it a customer buys or the features they choose. Legally, this practice is allowed as long as it does not harm competition or unfairly target certain groups of consumers. For example, a movie theater might offer lower prices for matinee showings compared to evening shows, which encourages more people to attend during less busy times. However, if a company uses this pricing strategy to exploit vulnerable consumers, it could face legal challenges. Overall, while second-degree price discrimination can benefit both the seller and the buyer, it must be practiced fairly and responsibly to protect consumer rights.

Detailed Explanation

Second-degree price discrimination is legal if it doesn't hurt competition. Other options are incorrect because Some people think all price discrimination is illegal; It's a common mistake to think this only happens in government-controlled areas.

Key Concepts

second-degree
legal aspects and regulations regarding price discrimination
Topic

Understanding Price Discrimination

Difficulty

medium level question

Cognitive Level

understand

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