What is a common approach in third-degree price discrimination?  A. Loyalty programs  B. Auctions  C. Everyday low pricing  D. Seasonal promotions

Common Approach in Third-Degree Price Discrimination

Third-degree price discrimination involves charging different prices to different groups of consumers for the same good or service, based on varying elasticities of demand among those groups. This strategy aims to maximize profit by capturing consumer surplus from different segments.

1. Loyalty Programs: These reward repeat customers with discounts or points, targeting specific consumer behavior rather than different segments.
2. Auctions: They can vary prices based on bids, but this is more dynamic pricing than third-degree discrimination.
3. Everyday Low Pricing: This strategy involves consistent pricing and does not differentiate between consumer segments.
4. Seasonal Promotions: While this can attract different customer groups during different times, it does not strictly classify consumers into distinct groups based on willingness to pay.

Final Answer

A. Loyalty programs are a common approach in third-degree price discrimination, as they target specific customer segments and adjust prices based on customer loyalty.