Which of the following is NOT an advantage of one price policies?

• A. They simplify transactions for both buyers and sellers.
• B. They promote transparency in the marketplace.
• C. They eliminate the need for bargaining and negotiation.
• D. They allow firms to perfectly price discriminate among consumers.

Answer: (D)

Verified step by step guidance

1. Step 1: Understand what a one price policy means. It is a pricing strategy where a firm charges the same price to all customers for a given product or service, without variation or negotiation.
2. Step 2: Identify the typical advantages of one price policies. These usually include simplifying transactions, promoting transparency, and eliminating the need for bargaining, because everyone pays the same price.
3. Step 3: Recognize what perfect price discrimination means. It occurs when a firm charges each consumer their maximum willingness to pay, which requires different prices for different consumers.
4. Step 4: Compare perfect price discrimination with one price policies. Since one price policies charge everyone the same price, they cannot allow firms to perfectly price discriminate among consumers.
5. Step 5: Conclude that the statement 'They allow firms to perfectly price discriminate among consumers' is NOT an advantage of one price policies, because perfect price discrimination requires charging different prices, which contradicts the one price policy.