In 2018, Spotify was available in many countries around the world. The same year, Spotify offered an attractive deal available only to students-Spotify Premium, Hulu Limited, and Showtime, all for one monthly payment of $4.99. The fee is half the amount charged for a standard Spotify Premium account. To qualify for the deal, students must provide their information, such as name and birthdate, to Spotify and its third-party partner, SheerID. SheerID is a verification service utilized by companies to confirm various personal attributes and qualifications. In this case, your current student status at a Title IX school is in a database, which is accessed by SheerID. a. In making this offer to students, Spotify is engaging in group pricing, where the market segments are students and nonstudents. using the hurdle method, getting people to self-identify their willingness to pay by requiring them to overcome one or more obstacles. engaging in perfect price discrimination, charging each individual based on her or his willingness to pay. b. By requiring third-party verification for the discount, rather than simply requiring an “.edu" e-mail address-as many other retailers do–Spotify effectively narrows the consumer base to students with the highest reservation prices. narrows the consumer base to students with the lowest reservation prices. ensures that its discount only applies to students, as opposed to professors or others employed at universities. O O
In 2018, Spotify was available in many countries around the world. The same year, Spotify offered an attractive deal available only to students-Spotify Premium, Hulu Limited, and Showtime, all for one monthly payment of $4.99. The fee is half the amount charged for a standard Spotify Premium account. To qualify for the deal, students must provide their information, such as name and birthdate, to Spotify and its third-party partner, SheerID. SheerID is a verification service utilized by companies to confirm various personal attributes and qualifications. In this case, your current student status at a Title IX school is in a database, which is accessed by SheerID. a. In making this offer to students, Spotify is engaging in group pricing, where the market segments are students and nonstudents. using the hurdle method, getting people to self-identify their willingness to pay by requiring them to overcome one or more obstacles. engaging in perfect price discrimination, charging each individual based on her or his willingness to pay. b. By requiring third-party verification for the discount, rather than simply requiring an “.edu" e-mail address-as many other retailers do–Spotify effectively narrows the consumer base to students with the highest reservation prices. narrows the consumer base to students with the lowest reservation prices. ensures that its discount only applies to students, as opposed to professors or others employed at universities. O O
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:In 2018, Spotify was available in many countries around the world. The same year, Spotify offered an attractive deal
available only to students-Spotify Premium, Hulu Limited, and Showtime, all for one monthly payment of $4.99. The fee
is half the amount charged for a standard Spotify Premium account. To qualify for the deal, students must provide their
information, such as name and birthdate, to Spotify and its third-party partner, SheerID. SheerID is a verification service
utilized by companies to confirm various personal attributes and qualifications. In this case, your current student status at a
Title IX school is in a database, which is accessed by SheerID.
a. In making this offer to students, Spotify is
engaging in group pricing, where the market segments are students and nonstudents.
using the hurdle method, getting people to self-identify their willingness to pay by requiring them to overcome one or
more obstacles.
engaging in perfect price discrimination, charging each individual based on her or his willingness to pay.
b. By requiring third-party verification for the discount, rather than simply requiring an “.edu" e-mail address-as many
other retailers do–Spotify effectively
narrows the consumer base to students with the highest reservation prices.
narrows the consumer base to students with the lowest reservation prices.
ensures that its discount only applies to students, as opposed to professors or others employed at universities.
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