Suppose Dublin Electronics Charges Regular Customers $90 for a Blu-Ray

question 165

Multiple Choice

Suppose Dublin Electronics charges regular customers $90 for a Blu-ray player but allows senior citizens to purchase the same item for $75.Is this likely to be a successful price discriminating strategy?

• A)Yes, firms price discriminate to maximize profits.
• B)No, price discrimination will not be effective because the store cannot prevent senior citizens from buying large quantities of Blu-ray players and reselling them for a profit.
• C)Yes, because senior citizens are likely to have a more elastic demand and therefore will be willing to pay a lower price compared to regular customers.
• D)No, because there are many different brands of Blu-ray players and consumers will shop around.

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Definitions:

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Service Set Identifier, the name assigned to a WiFi network to distinguish it from others.

Piggybacking

Unauthorized access of a secured wireless network by utilizing a legitimate user's connection without their knowledge.