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Many Food Retailers Offer Loyalty Cards That Track Purchases and Offer

Question 134

Multiple Choice

Many food retailers offer loyalty cards that track purchases and offer free items to customers after a certain threshold of purchases.Is this an example of price discrimination?


A) Yes.The store is separating its customers based on how much they spend,and the free items represent a value to the customer that differs from that which is received by other types of patrons.
B) Yes.Since the store is tracking purchases,it can offer individual customers discounted prices on items that are purchased most frequently.
C) No.Since every customer has the option to receive a loyalty card,there is no differentiation in benefits received by customers.
D) No.Since the rewards aren't a discount in price,it wouldn't qualify as price discrimination.
E) No.Because the retailer might discontinue the card at any time,the customer may never receive the earned free items.

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