The local coffee shop,Latté Café,has a frequent-buyer program that offers a 5 percent discount to customers who "like" its business page on Facebook.This allows the firm to price discriminate because
A) everyone will now know where to go for the best coffee in town.
B) increasing its customer base lowers prices for all consumers.
C) customers who are sensitive to price will take the time to go to the website.
D) only java-obsessed customers are eligible for the discount.
E) price-conscious customers are usually unwilling to sign up for discounts.

Question

Quizplus · Accepted Answer

By requiring the customer to take a specific action, in this case, liking the business page on Facebook, the firm can identify customers who are sensitive to price and offer them a discount. This allows the firm to charge a higher price to customers who are less price-sensitive, resulting in price discrimination. Additionally, the requirement for the customer to visit the business's Facebook page increases engagement and exposure for the business.

The Local Coffee Shop,Latté Café,has a Frequent-Buyer Program That Offers