At many amusement parks, customers who enter the park after 4 p

Economics Dec 18, 2020

At many amusement parks, customers who enter the park after 4 p.m. receive a steep discount on the price they pay. This is a type of price discrimination because the amusement park charges a higher price to

a) families with young children that are not in school.

b) people who have a more inelastic demand for amusement parks.

c) people who have a more elastic demand for amusement parks.

d) people who are rich enough to visit the amusement park for an entire day.

Expert Solution

The answer is b). In this case, people with less inelastic demand (for example, tourists with kids who are on vocation) is more willing to pay for a higher price due to time constraint, and firms can also profit from the price discrimination.

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