A museum in Russia has two entrances: one for locals (written in Russian) and one for tourists (written in English). People who enter through the entrance written in Russian will end up paying 81.93 Rubles ($3.00). English-speaking tourists will use the entrance written in English, but they will end up paying 409.67 Rubles ($15.00). This practice is an example of:
A) price manipulation.
B) price exploitation.
C) international price mediation.
D) price discrimination.

Question

Quizplus · Accepted Answer

The practice of having different prices for the same product or service based on the characteristics of the customer is known as price discrimination. In this case, the museum is charging locals a lower price than tourists, and this is an example of price discrimination based on geographic location.

A Museum in Russia Has Two Entrances: One for Locals