Suppose Coca Cola Company uses heat sensors and microchips to automatically change prices of its products.Which of the following economic concepts describes Coca Cola's goal to charge higher prices for a can of Coke on a hot day?
A) price discrimination
B) rent-seeking
C) deadweight loss
D) internalizing an externality

Question

Quizplus · Accepted Answer

Price discrimination is the practice of charging different prices for the same product or service to different consumers based on their willingness to pay. In this case, Coca Cola is using heat sensors and microchips to charge higher prices for a can of Coke on a hot day, which is an example of price discrimination as they are charging different prices for the same product based on consumer demand.

Suppose Coca Cola Company Uses Heat Sensors and Microchips to Automatically