Question

Samoa Airlines has begun setting its ticket prices based on the combined weight of the passengers and their luggage. Say that a 200-pound passenger with a 20-pound suitcase pays more than a 150-pound passenger with a 30-pound suitcase. Is this pricing method price discrimination? Explain your answer.

Answer 1

This is not price discrimination. In price discrimination, different customers are charged a different price for the exact same goods or services. However, in this case, different passengers are not availing the exact same service. Since different passengers have different body weights and they carry the luggage of different weight. Therefore, different customers are being charged different price because of a difference in the quantum of service availed. So, this is not price discrimination.