Key Terms

Match each of the terms on the left with its definition on the right. Click on the term first and then click on the matching definition. As you match them correctly they will move to the bottom of the activity.

Question

pricing strategy
price discrimination
arbitrage
direct price discrimination
perfect price discrimination (first-degree price discrimination)
segmenting (third-degree price discrimination)
indirect price discrimination (second-degree price discrimination)
quantity discount
incentive compatibility
versioning
bundling
mixed bundling
pure bundling
block pricing
two-part tariff
A firm’s method of pricing its product based on market characteristics.
The practice of reselling a product at a price higher than its original selling price.
A type of direct price discrimination in which a firm charges each customer exactly his willingness to pay.
A pricing strategy in which customers pick among a variety of pricing options offered by the firm.
The requirement under an indirect price-discrimination strategy that the price offered to each consumer group is chosen by that group.
A type of direct price discrimination in which a firm charges different prices to different groups of customers.
The practice of charging different prices to different customers for the same product.
A type of bundling in which the firm simultaneously offers consumers the choice of buying two or more products separately or as a bundle.
A pricing strategy in which the firm sells two or more products together at a single price.
A pricing strategy in which firms charge different prices to different customers based on observable characteristics of the customers.
A type of bundling in which the firm offers the products only as a bundle.
The practice of reducing the price of a good when the customer buys more of it.
The practice of charging a lower per-unit price to customers who buy larger quantities.
A pricing strategy in which the firm offers different product options designed to attract different types of consumers.
A pricing strategy in which the payment has two components, a per-unit price and a fixed fee.