When a firm charges each customer the maximum price that the customer is willing to pay, the firm:

A) engages in a discrete pricing strategy.
B) charges the average reservation price.
C) engages in second-degree price discrimination.
D) engages in first-degree price discrimination.

Reservation Price

The maximum amount a consumer is willing to pay for a good or service, beyond which they will not purchase the product.

Price Discrimination

The strategy of selling the same product to different customers at different prices based on factors like willingness to pay, not costs.

Discrete Pricing

Discrete pricing refers to the practice of setting prices at fixed amounts rather than having a continuous range of prices, often seen in goods sold in whole units rather than continuous quantities.