Joe and Moe debate the use of coupons by grocery stores. Joe says, "The use of coupons in grocery stores represents a means of price discrimination. It's pure and simple. Coupons are likely to reduce the price of groceries to people who are more price-sensitive than to those who are not." By contrast, Moe contends, "Coupons do not constitute price discrimination. They simply represent a way of temporarily changing the prices of some grocery items. Coupons reduce the price for everyone, not just for part of the market in which people's demands are more price-sensitive (price-elastic)." Do economists agree with Joe or with Moe?
A. Economists agree with Moe.
B. Economists agree with Joe.
2007-11-09 12:27:51 · 3 answers · asked by simon c 1 in Social Science ➔ Economics
Moe - price discrimination means you price according to certain conditions for example.. the price for movie tickets is cheaper for students and senior citizens (charging different price on certain criteria)
obtaining coupons is not price discrimination because any one person can obtain the coupon and obtain a discount on goods - so go with Moe...
2007-11-09 13:26:16 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Joe is exactly correct. Coupons are price discrimination, which simply means taking the same product and figuring a way for different people in the same market to pay different amounts for it, depending on how careful or price sensitive they are. Some people will pay more than others for a product, and by gosh you wouldn't want them NOT to pay more if you can help it.
Coupons are the perfect example.
2007-11-09 22:50:28 · answer #2 · answered by KevinStud99 6 · 0⤊ 0⤋
The lesser of two evils here is A which is Moe although I find some conclusions deceptive. Joe is definitely all wrong. Most Economists can never agree with one another. Does that help?
2007-11-09 20:39:46 · answer #3 · answered by Irish 7 · 0⤊ 0⤋