Question

When the NCAA basketball tournament will only sell tickets to all three games held at a given site as a package, it is practicing:

a. bundling.

b. first-degree price discrimination.

c. second-degree price discrimination.

d. markup pricing.

e. third-degree price discrimination.

Answer 1

Answer: Bundling

First-grade pricing discrimination, also called perfect price discrimination, happens when a company pays for each unit purchased a different amount. The company will charge for each product the highest possible amount, which helps the company to raise all inventory surpluses available.

A second degree price disparity arises when an company pays for specific amounts purchased, such as discounts on bulk sales, different costs.

The pricing or cost-plus pricing is a pricing method in which the price of the good or service is decided by comparing the cost of the goods with the mark up of a percentage. The client typically calculates the amount or mark-up at the appropriate return rate.

Discrimination of the level of the third degree. Third degree Discrimination means paying a higher price for the same product for different customer classes. Specific characteristics such as age, sex, location, time of use may be used to classify these customer groups.

None of above four is justifying the situation.

Where as,

Price bundling blends multiple goods or services for an all-inclusive discounted price into one extensive bundle. Since the goods are sold for reduced rates, they can increase profits if more than one item is purchased.

So the answer is a. bundling

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