An example of price discrimination is when A. movie theaters do not allow childr

Question

An example of price discrimination is when
A. movie theaters do not allow children into R-rated movies without a parent or guardian.
B. you can purchase a new PC for half the price of a new Mac, even though they are both computers.
C. Procter & Gamble charges $9 for a bottle of Tide laundry detergent, while the store brand costs the consumer significantly less, despite being somewhat similar products.
D. out-of-state students pay more for the same education as in-state students.
E. a grocery store charges $3.00 for a box of Froot Loops on Tuesday, but charges $2.80 for a box of Froot Loops on Wednesday.

Explanation / Answer

D. out-of-state students pay more for the same education as in-state students.

Explanation: Price discrimination takes place when a firm charges different prices for the same goods to different groups of customers. Here, out-of-state students and in-state students are different groups of customers who are charged different prices for the same education.

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