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Explain How Each of the Following Industries Practices Price Discrimination

question 220

Essay

Explain how each of the following industries practices price discrimination.
a. Movie theaters
b. Airlines
c. Auto dealers
d. U.S. Postal Service


Definitions:

Externality Problem

A situation where the actions of individuals or firms result in costs or benefits to others that are not reflected in the market prices.

Subsidy

A financial contribution provided by government to reduce the cost of producing goods or services and support businesses or consumers.

External Costs

Costs of an economic activity that are not borne by the parties directly involved in the transaction but by other individuals or society at large.

Supply Curve

A graph that represents the relationship between the price of a good and the quantity of the good that suppliers are willing to offer for sale.

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