Complete the following table by indicating whether or not each scenario is an example of price discrimination.
Hint: To determine if a scenario is an example of price discrimination, think about whether the market can be segmented into two groups that pay different prices for the same good.
|Hotels charge a higher price for rooms with a nicer view, such as a skyline view or a coastal view. Assume that all consumers receive a higher utility when staying in a room with a nicer view.|
|Last-minute "rush" tickets can be purchased for most Broadway theater shows at a discounted price. They are typically distributed via lottery or on a first-come, first-served basis a few hours before the show. Assume that the theater in question does not hold seats in reserve for this purpose, but rather offers rush tickets only for seats not sold before the day of the performance.|
Price discrimination is the practice of (legally) charging different prices to different groups based on their willingness to pay.
Answer and Explanation: 1
With price discrimination, produces estimates how much people are willing to pay for different goods and services and charges difference prices to...
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fromChapter 3 / Lesson 53
Read a price discrimination definition, understand the types of price discrimination, learn about the three degrees of price discrimination, and explore examples.