Corinne gives private art lessons to children. She wants to price discriminate based on the household income of her students. She does not know the exact household income of her students but wants to estimate it, to put them into different price segments. What easily verifiable measure of income could she use?
A)Household income taxes
B)Public or private school attendance
C)Child's participation in sports
D)Year in school

Question

Quizplus · Accepted Answer

Public or private school attendance is a good measure of household income because the cost of attending these schools varies widely based on the household's financial situation. Families with higher incomes are more likely to be able to afford private school tuition or live in neighborhoods with expensive homes that fund public schools with higher per-pupil spending. Therefore, Corinne could use whether the child attends a public or private school as a way to estimate the household income and price discriminate accordingly.

Corinne Gives Private Art Lessons to Children