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Chapter 11: Problem 5

Each of the following would be a form of price discrimination except ______. a) providing low-priced meals to senior citizens who dine before 6 p.m. b) charging higher airfares to business travelers than to vacationers c) charging one high price to all customers d) charging adults more than children for movie admissions

Short Answer

Expert verified
The correct answer is c) Charging one high price to all customers, as it does not represent price discrimination since the company charges the same price to every customer, regardless of their willingness or ability to pay.

Step by step solution

01

Option a) Providing low-priced meals to senior citizens who dine before 6 p.m.

This option is a form of price discrimination, as the restaurant is offering a lower price to a specific group of customers, namely senior citizens who dine early. By offering a lower price, the restaurant is aiming to attract more senior customers who may have a tighter budget or prefer to eat earlier in the day.
02

Option b) Charging higher airfares to business travelers than to vacationers

This option is also a form of price discrimination. Airlines often charge higher airfares to business travelers, as they are generally more willing and able to pay higher prices for their tickets. Vacationers, on the other hand, may be more price-sensitive and may choose a different airline if the prices are too high. This strategy allows airlines to maximize their revenue from different customer segments.
03

Option c) Charging one high price to all customers

This option does NOT represent price discrimination, as the company is charging the same price to every customer, regardless of their willingness or ability to pay. In this situation, the company is not taking advantage of different customer segments and may miss out on potential revenue.
04

Option d) Charging adults more than children for movie admissions

This option is a form of price discrimination, as the movie theater is charging different prices for the same service based on the age of the customer. This strategy recognizes that children may be less willing or able to pay the full adult price, and by offering a lower price for children, the movie theater can attract more families to their screenings. Based on our analysis, the correct answer is: c) Charging one high price to all customers

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Most popular questions from this chapter

Which statement is true about perfect price discrimination? (LO4) a) It is very common. b) It is illegal. c) The larger the market, the more likely one is to find it. d) None of the above.

Each of the following is an example of price discrimination except _____. a) airline "youthfares" b) higher-price movie tickets after 5:00 p.m. and on weekends c) doctors charging more to patients who need lab tests d) A\&P's old grades A, B, and C

Under perfect price discrimination _____. a) consumer surplus is zero b) consumer surplus is maximized c) consumer surplus is a constant no matter what price is charged d) consumer surplus rises as price is lowered

Perfect price discrimination eliminates of the customer's consumer surplus. _____. a) all b) most c) some d) none

Which statement about price discrimination is true? (LO4) a) It generally hurts the poor. b) It is inherently evil. c) It involves charging at least two separate prices for the same good or service. d) It generally involves deceiving the consumer.
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