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Ilovebacon22 Ilovebacon22
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4 years ago

The Athenian Theatre sells tickets for the same play at different prices: a lower price to those who opt for the seats at the back of the theatre and a higher price for those who purchase seats in the front, around the stage. Which of the following statements is true?



▸

The theatre practices first-degree price discrimination by setting prices based on willingness to pay.



▸

Charging two different prices is an effective way to avoid an excess demand for play tickets; the higher price lowers quantity demanded to some extent.



▸

This is an example of product differentiation but not price discrimination.



▸

Since the cost of producing the play does not change with the seating configuration, this is evidence of price discrimination based on market segmentation.

Textbook 
InMicro

InMicro


Edition: 1st
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peaceout3000peaceout3000
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4 years ago
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Ilovebacon22 Author
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Helped a lot
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