Asked by lauren delancellotti on Jul 07, 2024
Verified
McDonald's restaurant located near the high school offered a Tuesday special for high school students. If high school students showed their student ID cards, they would be given 50 cents off any medium combination meal. This practice is an example of:
A) collusion.
B) price discrimination.
C) two-part tariff.
D) bundling.
E) tying.
Price Discrimination
The strategy of selling the same product at different prices to different segments of consumers, based on their willingness to pay.
Combination Meal
A set meal at a restaurant that includes multiple items at a fixed total price, often providing a discount compared to purchasing items separately.
Student ID
A unique identifier assigned to students by educational institutions for tracking and administrative purposes.
- Understand the concept of price discrimination and its types (first-degree, second-degree, third-degree).
- Identify the conditions under which firms engage in different types of price discrimination.
Verified Answer
AY
Alison YoungJul 10, 2024
Final Answer :
B
Explanation :
This is an example of price discrimination because McDonald's is offering a discount to a specific group of customers (high school students with ID cards) based on their willingness to pay.
Learning Objectives
- Understand the concept of price discrimination and its types (first-degree, second-degree, third-degree).
- Identify the conditions under which firms engage in different types of price discrimination.