If Coca Cola Company uses heat sensors and microchips to automatically change prices of its products.Which of the following economically describes Coca Cola's goal to charge higher prices for a can of Coke on a hot day?
A)price discrimination
B)rent-seeking
C)deadweight loss
D)internalizing an externality

Question

Quizplus · Accepted Answer

Coca Cola's use of heat sensors and microchips to automatically change prices based on the weather conditions is an example of price discrimination. By charging higher prices on hot days when the demand for their products is higher, they are able to maximize their profits by capturing the consumer surplus that would otherwise be lost.

If Coca Cola Company Uses Heat Sensors and Microchips to Automatically