Question

1 points The Wavehouse on Mission Beach in San Diego features the Bruscus Maximus, a ten foot wave, which tests the skills of even the most talented surf and wakeboardders on the planet Wavehouse is the only place in San Diego where this services offered. You can B. Max for 50 for the first hour, 511 for the second hour, and for the hour. Why would Wavetouse charge different prices for each subsequent hour of to capture consumer surplus among roups of buyers to create customer loyalty to encourage skill development to capture consumer surplus among units of a good

Answer 1

Ans. Option a

Charging different price for subsequent hours is a type of quantity discount. Here the consumer has to pay less for more and more units of consumption. Due to law of diminishing marginal utility, the willingness to pay for each subsequent hour will fall for each consumer. Thus, to capture consumer surplus of the group of buyers, the company practices this type of price discrimination (called second degree price discrimination)

* Please don’t forget to hit the thumbs up button, if you find the answer helpful.

Thank You