Asked by Aaron Jared on Sep 24, 2024

verifed

Verified

​Many bars close to campuses have started offering cheaper beer to consumers with a student IDs.These bars are using

A) ​Direct price discrimination
B) Indirect price discrimination
C) Decreasing returns to scale
D) ​None of the above

Direct Price Discrimination

A pricing strategy where a seller charges different prices to different customers for the same product or service, based explicitly on the customer's willingness to pay.

Indirect Price Discrimination

A pricing strategy where different prices are charged for the same product or service in different markets or segments, not directly by customer characteristics.

Decreasing Returns

Refers to a situation in which adding more of a production factor, such as labor or capital, results in progressively smaller increases in output.

  • Discern the differences between direct and indirect methods of price discrimination.
verifed

Verified Answer

AM
Akanksha Mittalabout 5 hours ago
Final Answer :
A
Explanation :
These bars are engaging in direct price discrimination because they are charging different prices based on the consumer's status as a student.