By selling hardcover books to die-hard fans and paperback books to less enthusiastic readers, the publisher is able to price discriminate and raise its profits.

Question

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This strategy allows the publisher to segment the market based on willingness to pay, charging higher prices to those valuing the product more (hardcover buyers) and lower prices to those with less willingness to pay (paperback buyers), thus maximizing profits through price discrimination.

By Selling Hardcover Books to Die-Hard Fans and Paperback Books