Before he became Dr McDreamy in Grey's Anatomy. Patrick Dempsey plays. Ronald, an awkward high school student in the romantic comedy Can't Buy Me Love (1987). In the film, Ronald pays Cindy, the most popular girl in school, 1,000$ to date him for a month. Cindy's old boyfriend was the former star quarterback who was equally as popular as Cindy and did not have to pay to date her. Explain how Cindy is practising price discrimination with her dating practices.
Price discrimination is a micro economic pricing strategy by which same product is sold to different consumers at different prices depending upon how much they will be willing to pay; thus maximum price is obtained from a customer. For example a product having higher demand in a particular region can be sold at a higher price whereas if the competition is high in a region the price will be reduced.
Cindy is practicing price discrimination as she is charging $ 1000 for dating Ronald whereas she dated her previous boyfriend for free. This is because her previous bf was as popular as Cindy so he could get other attractive girls and was unwilling to pay her for dating him, so she dated him for free. Whereas Ronald was an awkward high school student, not very popular and willing to pay the amount so she charged him.
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