Many colleges provide students from low-income families with scholarships, subsidized loans, and other programs so that they pay lower tuitions than students from high-income families. Explain why universities behave this way. Universities use scholarships, loans, and other programs to charge low-income students different prices (e. g., different tuition) than high-income students to increase profit with

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Business

Reyna

1 October, 07:49

Many colleges provide students from low-income families with scholarships, subsidized loans, and other programs so that they pay lower tuitions than students from high-income families. Explain why universities behave this way. Universities use scholarships, loans, and other programs to charge low-income students different prices (e. g., different tuition) than high-income students to increase profit with

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Jan Stephenson · Answer 1

The options for answering this question are the following:

A. nonlinear price discrimination.

B. peak-load pricing.

C. two-part pricing.

D. group price discrimination.

E. bundling.

The correct answer is D. group price discrimination.

Explanation:

Price discrimination is a practice that involves charging for the same good or service, different prices to different consumers. This, although the cost of providing them is the same.

Group price discrimination can be defined as the capacity with which certain companies have to charge different amounts of money to different types of people for the same product. It basically means that, although a company invests the same amounts to produce and distribute an input, it will charge different prices to different types of shoppers.