Examine the following statements and identify the type of price discrimination in each case:
a. A popular club in a city waives its entry fees for women who arrive before 11 p.m.
b. A combo meal of a burger, a soft drink, and fries at a fast food outlet costs less than how much it would cost to buy each separately.
c. A guy selling counterfeit watches on the street states a different price to each person who wants to buy a watch.
a. This is an example of third-degree price discrimination; the club offers a different price to a certain group of consumers based on their gender and price elasticity of demand.
b. This is an example of second-degree price discrimination; consumers are charged different prices based on the quantity they purchase.
c. This is an example of third-degree price discrimination; consumers are charged a different price based on various attributes. The seller may form an estimate of how much a customer is willing to pay based on the location that he is in, the customer's gender, the car that the customer drives, etc.
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