Question on price discrimination

label Economics
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schedule 1 Day
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Price discrimination is practiced by movie theaters, motels, golf courses, drugstores, and universities. Are they monopolies? If not, how can they carry out price discrimination?

Oct 19th, 2015

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These are not monopolies. Price discrimination is usually easily practiced in these areas since the kind of customers who visit these areas have a high price inelasticity such that their demand for such things will not reduce significantly due to an increase in the price level. In addition, most of these services are luxurious and their price elasticity to price is very low. These issues makes it easier for these players to easily practice price discrimination. 


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Oct 19th, 2015

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