Question

QUESTION 3 in offlering a family package 4. Peak load pricing 12. Efficient

Answer 1

Second-degree price discrimination is charging a different price for different quantities such as a discount for bulk purchase. Here Apple music charges a different price for different quantities and also gives a quantity discount for the family package. so it is second-degree price discrimination.

Apple music is employing second-degree price discrimination in offering a family package.

first-degree price discrimination is charging the reservation price from consumer to attract total consumer surplus. third-degree price discrimination is charging different price from the different consumer. If raising price does not increase profit second and third-degree price discrimination should not apply as here different price set is involved for different consumer and quantities.

if raising its price will never lead to greater profits for apple music this would indicate that it has been forced to adopt first-degree price discrimination.

If jack purchases a family package then sell access to Apple music to Jill he is engaging in arbitrage.