Answer:
It is not an example of price discrimination
It is an example of price discrimination
Explanation:
Price discrimination is when the same product is sold at different prices to customers in different markets
types of price discrimination
1. first degree price discrimination : here sellers charge each consumer at their willingness to pay in order to eliminate consumer surplus.
2. second degree price discrimination : here firms offer different prices depending on the quantity purchased. e.g. giving discounts for bulk purchases.
3, third degree price discrimination : firms charge different prices to different groups of customers. e.g. having a certain price for senior citizens, students
Requirements to practice successful price discrimination
1. The firm must have market power. If the firm does not have market power and attempts to price discriminate they would lose customers
2. The firm must have different elasticities of demand for their product in different markets
3. The firm must be able to segment the market for their products
the first scenario is not an example of price discrimination because both customers that know about the sale and those that do not, end up paying the same price. Consumers are not segmented.
the second scenario is an example of price discrimination because different prices are offered to different groups of consumers based on location travelled and specified travel period. this most likely is an example of third degree price segmentation
