Question

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

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

 Scenario

•  Last-minute "rush" tickets can be purchased for most Broadway theater shows at a discounted price. They are typically distributed via lottery or on a first-come, first-served basis a few hours before the show. Assume that the theater in question does not hold seats in reserve for this purpose, but rather offers rush tickets only for seats not sold before the day of the performance. 

• Most restaurants will supply a free dessert if it is the customer's birthday. Assume that this is not specifically advertised by restaurants.

Answer 1

1. YES: This is because the discounted tickets are allotted using lottery or first come first serve basis.
2. NO: This is because the discount will only be provided to a single person and not an entire section of people. Plus, it is not something advertised, but is rather a gesture of thanksgiving to its customers.