Question

At many amusement parks, customers who enter the park after 4 p.m. receive a steep discount on the price they pay. This is a type of price discrimination because the amusement park charges a higher price to

a) families with young children that aren’t in school.
b) people who have a more inelastic demand for amusement parks.
c) people who have a more elastic demand for amusement parks.
d) people who are rich enough to visit the amusement park for an entire day

Answer 1

Answer:

The answer is b) people who have a more inelastic demand for amusement parks.

Explanation:

For this price discrimination strategy, amusement parks are aiming at people who are more willing to come to the amusement park to spend more hours at the park and does not care about entry price as much as other people who are not normally willing to visit the park; instead, may be take a try for one or two hours at the end of the day at deep discounted price.

So, high price will be charged to people less care about entry price, in other works their demand for the amusement parks is relatively more inelastic to other people.

Thus, b is the right choice.