Biology Forums - Study Force

Question 1.

Your text refers to airlines as "The Kings of Price Discrimination." Why is price discrimination common in the airline industry?

Question 2.

Suppose a restaurant is trying to determine how much to charge for a bowl of chili, and decides to run an experiment to see how much its customers are willing to pay by allowing them to set their own price for this menu item.

a.	Is charging a customer the price he or she is willing to pay for the bowl of chili an example of

price discrimination? Briefly explain.

b.	What is it called when a firm knows every consumer's willingness to pay, and can charge every

consumer a different price? What happens to consumer surplus in this situation?

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