Consider the following scenario: The price of a gallon of gas at a SwellGas station in the center of a densely populated suburban area is $3.00 per gallon, but the price of a gallon of gas at the SwellGas station at a rest area right off the highway is $3.50 per gallon. Is this an example of price discrimination?

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30 August, 08:30

Consider the following scenario: The price of a gallon of gas at a SwellGas station in the center of a densely populated suburban area is $3.00 per gallon, but the price of a gallon of gas at the SwellGas station at a rest area right off the highway is $3.50 per gallon. Is this an example of price discrimination?

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Caitlyn Moran · Answer 1

Answer: Yes, this is an example of Price discrimination.

Explanation:

The word price discrimination refers to the different prices of the same products at different locations.

This is good for the people purchasing it because the people of different areas have different demand and different usage.

Hence, the gas stations have different prices for different locations. The area that have lower demand has higher price and the areas that have more demand has lower price.