Question

A chocolatier produces truffles and sells each 1 pound box of truffles for $20. However, the chocolatier knows that some consumers would be willing to pay more than the cost of the chocolate, but less than $20 per pound, and wishes to sell truffles to these consumers as well. Which of the following price discrimination methods relies on the chocolatier knowing which types of consumers are likely to have a lower willingness to pay?
1) Offering one free box of truffles to anyone who purchases two boxes
2) Selling misshaped truffles in bulk at a price of $12 per pound
3) Offering a discount to students and seniors
4) Offering a 20% off sale on a single type of truffle each week

Answer 1

Answer: Offering a discount to students and seniors will allow the chocolatier to know which types of consumers are likely to have a lower willingness to pay.

Here the price discrimination should be in respect with the demography i.e. allow the chocolatier to sell truffles to the consumer based on their age groups.

The correct option is (3).