Question

4) Consumers of the Harry Potter books (at some point) had a choice between hardback and paperback. The hardback books were around $19.95 and the paperback books were around $8.25. Is this price discrimination, why or why not? Write a paragraph explaining your position.

5) Many big cities offer public transportation networks. Usually there is a monthly pass that can be purchased by locals. However, people can also buy a one-day pass…but it is far more expensive than 1/30^th of the monthly price. Is this price discrimination? Write a paragraph fully explaining your logic.

6) In Dallas, the Sunday newspaper costs significantly more than the weekday paper…about 3 times as much…but it is a little bigger. Is this price discrimination? Write a paragraph explaining your answer.

Answer 1

4. This is not an example of price discrimination. In price discrimination, different consumers are charged a different price for the same product. For example, there can be 'early bird' discounts for a movie ticket or ticket for a rock concert, in which consumers buying tickets early pay lower than the consumers buying tickets later for the same movie or concert. Here, the paperback book and the hardcover book are different products as they have different look and feel, different durability, different paper quality, different production cost, etc. Therefore, here the publisher is charging two different prices for two different products and not for the same product. So, this is not an example of price discrimination.