Question

Question 1

1. Dave is an Australian tourist shopping at the Tokyo Fish Markets. He approaches a stall to purchase some salmon. Hiro, the owner, offers him 1 kilogram of salmon for 2,200 yen. Alternatively, if Dave is willing to purchase 5 kilograms he can pay 1,800 yen per kilogram. Hiro is:

   1. price discriminating.
   2. using first degree price discrimination against Dave.
   3. using second degree price discrimination against Dave.

   Which of the above statements are true:

   		Only 1 is true.
   		Only 2 is true.
   		Both 1 and 3 are true.
   		Both 2 and 3 are true.
   		All three are true.

Answer 1

Ans.- Only 1 is true.

It is not the case of first degree price discrimination where seller charges different price for each unit sold .It is also not the case of second degree price discrimination.