Managerial Economics and Strategy, 2/e

Chapter 10

1. 1.4 The colleges may be providing scholarships as a form of charity, or they may be price discriminating by lowering the final price to less wealthy families (with presumably higher elasticities of demand). Because wealthier families have lower elasticities (and higher willingness to pay) than poor families, they pay higher prices.

2. 1.5 A Disneyland ticket clearly identifies whether it is a child’s ticket or an adult’s ticket. Thus, only children are allowed to enter using a child’s ticket. Similarly, local residents are required to show identification (such as a driver’s license) before being allowed to enter using a local resident ticket. Using these methods prevents resale across groups.

3. 2.2 Under perfect price discrimination, ...