Great Nuggets finds that there is a clear gender difference in the demand for their chocolates. Men have very little price sensitivity and tend to buy whatever the sales clerk recommends. Women, on the other hand, tend to ask many questions about product quality and attempt to maximize the quantity available for the price. Great Nuggets would like to implement a two-tier pricing system based on gender. What (nonlegal) problems would it encounter?
What will be an ideal response?
The problem this firm would face is the resale of their candies-that is, women buying candy for men in exchange for a cash transfer. The ability to price discriminate with higher prices for more inelastic demanders is limited by the ability of consumers to engage in resale.
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A normal good is a good for which the demand increases as income decreases, holding everything else constant
Indicate whether the statement is true or false
In a circular-flow diagram, the saving and taxation "pipes" are carrying
A) injections to firms. B) injections to households. C) leakages from firms. D) leakages from households.
If the federal government borrows to build a new dam in North Dakota with a rate of return above the borrowing rate, and later raises federal income taxes to pay the interest, future welfare in the United States is
A) redistributed and lowered overall. B) redistributed but not lowered overall. C) not redistributed but lowered overall. D) not redistributed and not lowered overall.
The giving up of a good or activity in order to obtain some other good or activity is called:
a. a tradeoff. b. a cost analysis. c. a random choice. d. an opportunity cost. e. a sunk cost.