Answered: The first condition for price…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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The first condition for price discrimination is having a separate market. The second condition is to prevent resale between markets.

Topic: Pink Tax

How does pink tax meets the second condition?

Expert Solution

Introduction

Price discrimination occurs when a company charges different rates to different consumers for the same goods or services, despite the fact that the firm's costs to serve each consumer are the same. Price discrimination is mostly legal, with the exception of a few instances when it has been ruled illegal, such as when producers charge distributors different rates for the same goods when there are no cost differences.

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