How does coupon clipping allow for price discrimination?
A) Coupon mailers are sent out only to economically disadvantaged households.
B) Businesses are able to reward those customers who truly want their product by offering them a better deal than the casual consumer.
C) Because coupon users are less price-sensitive,they require large differences in price to be apparent before they will be convinced to make a purchase.
D) One price is charged to people who put forth the effort to use the coupon,while another price is charged to consumers for whom the marginal cost of finding and using the coupon is greater than the marginal benefit of a lowered price.
E) It allows for price discrimination only if the consumer engages in extreme couponing,where the risks outweigh the rewards.

Question

Quizplus · Accepted Answer

Coupon clipping allows for price discrimination by offering different prices to consumers who use coupons and those who do not. This is because some consumers may find the effort of finding and using coupons to be greater than the benefit of a lower price, while others may highly value the savings and prioritize coupon use. By charging different prices to these groups, businesses can effectively price discriminate based on willingness to engage in coupon clipping.

How Does Coupon Clipping Allow for Price Discrimination