Question

7) In many European cities, tourists are charged one price to enter parks, exhibits, museums, etc. and locals are charged a lower price. Might this tie into price discrimination in some way? Write a paragraphexplaining your answer.

8) Carolina Shores rents vacation homes in NC’s Outer Banks and rents out vacation homes for homeowners. They have 2 different fees that they charge to homeowners.

If the house is on a paved road in town, the commission to the homeowner is 12%.

If the house is in the “four-wheel-drive section” (further away and only accessible by driving on the beach with a 4 wheel drive vehicle) the commission to the homeowner is 16%.

Is this price discrimination? Write a paragraph explaining fully.

9) Sheetz has two gas stations in a large town in South Carolina. The station next to the highway charges about 5% more per gallon than the station that is about half of a mile into town from the highway. How might this tie into price discrimination? Write a paragraph explaining your logic.

Answer 1

7

Yes this example is of price discrimination between foreign and local tourists because tourists cannot come again and again in other european cities/countries and that's why they can be charged higher price for the tickets for visiting parks, exhibits, museums, historical place, etc. and moreover due to time and distance they are willing to pay the higher price for the tickets than locals because locals can visist any time the places like parks, exhibits, museums, historical places, etc and these places are also near to them and being local their local government does charge them high price because locals won't be willing to pay them.

8

Yes this is also a type of price discrimination because Carolina shores charges different comssion basis locality of the homes, Homes which are in town and on the paved road and is not that much a happening location for the buyers and that's why commission charged is only 12 % whereas another location which is on the four wheeled driving section and only accessible by driving on the beach with a four wheeled drive vehicle gives home buyer a scenic beauty of beach and accessibility by four wheeled vehcile gives a sense of reputation in the society and that's why it is possible for Carolina Shores to charge higher commission of 16% from home buyers.

9

In this condition price discrimination is possible becuase station next to highway is more accessible to the buyer than the station which is half miles into town and less accessible and buyer will find it easy to buy gas from the station next to the highway because it saves their time and it is available right on the highway and that's why are ready to pay price which 5% more per gallon than the station which in half a mile into town.

Station which is in the town is first less accessible and second it will consume precious time of consumer/customer to first access that station and then buy the gas and due to this difference buyer/consumer/customers are ready to pay 5% more for gas per gallen to station which is next to the highway than this one which is half a mile into town.