Ricky and Anita Are 10 Year-Olds Who Have a Lemonade

question 80

Multiple Choice

Ricky and Anita are 10 year-olds who have a lemonade stand on a busy beach and would like to practice price discrimination. They know that they are the only sellers of lemonade on the beach and that adults have a less elastic demand for lemonade than kids so they decide to sell their lemonade for $0.25 to kids and $0.50 to adults. Will their price discrimination be successful? Why or why not?

• A) Yes, they have all of the necessary criteria to successfully price discriminate.
• B) Yes, the only necessary conditions is that they know the relative elasticities of the market segments.
• C) No, the kids who buy their lemonade can practice arbitrage.
• D) No, Ricky and Anita are price takers.

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Definitions:

Family Support Policies

Government or organizational policies designed to support families through financial aid, healthcare, parental leave, and other means.

Welfare Dependency

A situation where individuals or families rely on government welfare support for their income over an extended period, often debated in terms of social policy and economic impact.

Childcare

The care and supervision of a child or children, typically from infancy to adolescence, by a person other than the child's legal guardians.

Gender Gap

Refers to the disparities between men and women in various aspects of life, including but not limited to income, employment opportunities, education, and political representation.