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Question
Bakeries will often offer a discount on items that were made the day before but did not sell. How is this an example of price discrimination?
a. Discounting the items, as opposed to giving them away, prevents customers from attempting to resell them.
b. Making items of high enough quality to sell the following day means that a bakery has a certain degree of market power.
c. It connects the bakery with buyers who value day-old products but arent willing to pay the full price for a product that isnt fresh.
d. Individuals with an inelastic demand for baked goods will travel to a different bakery if their preferred bakery runs out of fresh product.
e. The bakery is unable to distinguish between types of buyers with fresh product, so it is forced to keep old baked goods in order to maximize profit.
Answer
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