Under Scenario II, assume that segment 2 is predominantly comprised of small businesses with less than 10 employees and therefore can be priced differently using 'size of business' as justification for discounts. What is true concerning price discrimination at the segment level? (Please assume that Segment 1 and Segment 3 are both comprised of medium to large businesses and are indistinguishable for pricing purposes)

Question 190

Under Scenario II, assume that segment 2 is predominantly comprised of small businesses with less than 10 employees and therefore can be priced differently using 'size of business' as justification for discounts. What is true concerning price discrimination at the segment level? (Please assume that Segment 1 and Segment 3 are both comprised of medium to large businesses and are indistinguishable for pricing purposes)

Scenario II: Brand X retains its free service and introduces two additional subscription-based services: one providing up to 300 automated calculations and the other providing an ad free environment for manual calculations targeted at ad sensitive customers

Group of answer choices

A. Under optimal prices, segment-level price discrimination allows total revenue for Brand X to exceed $1.3 million.

B. Optimal prices are possibly infeasible owing to consumer fairness concerns as the price for manual ad-free calculators vastly exceeds the price for calculators with up to 300 calculations.

C. There is no pricing design with pure segment-level discrimination that can beat the expected revenue from a design that sets a fixed price for different versions.

D. None of the above.