Price Discrimination

Basic Concepts (1) Restaurants give senior citizens a 30% discount on their meals. Why would firms do this? How is this an example of price discrimination? (2) Firms offer coupons that reduce the price consumers must pay. Why would firms do this? How is this an example of price discrimination? (3) The Guthrie Theater has ticket prices for afternoon performances that are far less than the ticket prices for its evening performances. Why would firms do this? How is this an example of price discrimination? (4) If you buy an airline ticket at the last minute you pay a much higher price than if you buy the ticket weeks in advance. Why would firms do that? How is this an example of price discrimination? (5) Sometimes firms will charge lower prices to higher income individuals. The author gives the example of how local consumers are charged more than tourists even though the local customers have high incomes. Why would firms do that? Clever Ways to Get People To Reveal How Much They Are Willing to Pay (1) How did coffee sellers use fair trade coffee to engage in price discrimination? (2) How do grocery stores use organic foods to engage in price discrimination? (3) Why do firms make certain products unattractive in order to be able to engage in price discrimination?