Why do you suppose that the Marseilles drug dealer also seeks to prevent customers from reselling drugs to other buyers?

A drug-dealing operation differs from other firms because it sells an illegal product. The structure of the dealer's loyalty-discount-card program, however, parallels similar programs offered by many other firms,like grocery stores.

This buyer's demand is elastic, so charging alower cost generatesa rise in quantity demandedthat's proportionately large inrespect to the proportionate decrease in price. Reducingthe value for the cardholder, therefore, raises the drug dealer's revenues and profits.

They do soto spice up their profits. Keeping records of customer transactions using these cards reveals to a retailer whether a buyer goes tothe difficulty to hunt rock bottom available price. If so, that buyer is sensitive to changeswithin the item's price.