In January of 2014, Rogers cable was offering new customers cable TV, internet access, and a PVR, for $19.95 a month.Renting just a PVR from Roger's would cost existing customers $25.07 a month.Is Rogers engaging in price discrimination, and if so, why?
A)No, it is not; it is merely differentiating its product by offering different levels of service.
B)No, it is not. Its decision to give priority to new customers is a business strategy independent of pricing.
C)Yes it is; Rogers is charging different prices for the same service. It does this to increase its profit.
D)Yes it is; Rogers wants to discourage those existing customers from watching too much TV because they lower the firm's profits.

Question

Quizplus · Accepted Answer

Rogers is engaging in price discrimination by charging different prices for the same service. The lower price for new customers is a strategy to attract them, while the higher price for existing customers is an attempt to maximize profits by charging what they are willing to pay.

In January of 2014, Rogers Cable Was Offering New Customers