Question

6. Examples of price discrimination

Complete the following table by indicating whether or not each scenario is an example of price discrimination.

Hint: To determine whether a scenario is an example of price discrimination, think about whether the market can be segmented into two groups that pay different prices for the same good.

Scenario	Price Discrimination? (Yes or No)
Hotels charge a higher price for rooms with a nicer view, such as a skyline view or a coastal view. Assume that all consumers receive a higher utility when staying in a room with a nicer view.
The price of a gallon of gas at a SwellGas station in the center of a densely populated suburban area is $3.06 per gallon, but the price of a gallon of gas at the SwellGas station at a rest area right off the highway is $3.57 per gallon.

Answer 1

1, In the first case we can see in the case that the hotel is charging the same price to anyone who wants to stay in a NICER VIEW.

and demand the same amount of money. So there is no price discrimination as there are not two segmented groups

So the answer is NO

2. In this case, the groups can be segmented into two parts -

a.people living in densely populated area

b.people driving or living in highway(outskirt)

so here is price discrimination as two types of price are charged.

So the answer is YES