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5 February, 01:59

Many bars close to campuses have started offering cheaper beer to consumers with a student IDs. These bars are using a. Direct price discrimination b. Indirect price discrimination c. Decreasing returns to scale d. None of the above

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  1. 5 February, 03:11
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    The correct answer is letter "A": Direct price discrimination.

    Explanation:

    Price discrimination refers to setting the same product or service at different prices because of a special feature of customers such as age, gender, income, location, just to mention a few. Price discrimination always carries an excuse so the offering of products at prices can be considered legal.

    Direct price discrimination is provided when a different price is provided to a specific group benefiting individuals who may need the reduction of price the most. Direct price discrimination is given according to the identity of the consumer.

    Therefore, if a bar offers discounts to college students showing their IDs, they will be implementing direct price discrimination.
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