Reflect on the following excerpt from a Washington Post article about dynamic pricing by online retail giant Amazon.com and answer the following questions:
Few things stir up a consumer revolt quicker than the notion that someone else is getting a better deal.That's a lesson Amazon.com has just learned.Amazon,the largest and most potent force in e-commerce,was recently revealed to be selling the same DVD movies for different prices to different customers.It was the first major Web test of a strategy called "dynamic pricing," which gauges a shopper's desire,measures his means and then charges accordingly.The Internet was supposed to empower consumers,letting them compare deals with the click of a mouse.But it is also supplying retailers with information about their customers that they never had before,along with the technology to use all this accumulated data.While prices have always varied by geography,local competition and whim,retailers were never able to effectively target individuals until the Web."Dynamic pricing is the new reality,and it's going to be used by more and more retailers," said Vernon Keenan,a San Francisco Internet consultant."In the future,what you pay will be determined by where you live and who you are.It's unfair,but that doesn't mean it's not going to happen."

-For the consumer who might have to pay based on "where you live and who you are," perfect price discrimination may feel unfair because it results in a
A) decrease in total welfare.
B) loss of consumer surplus.
C) loss of producer surplus.
D) decrease in deadweight loss.
E) loss of market efficiency.

Question

Reflect on the following excerpt from a Washington Post article about dynamic pricing by online retail giant Amazon.com and answer the following questions:
Few things stir up a consumer revolt quicker than the notion that someone else is getting a better deal.That's a lesson Amazon.com has just learned.Amazon,the largest and most potent force in e-commerce,was recently revealed to be selling the same DVD movies for different prices to different customers.It was the first major Web test of a strategy called "dynamic pricing," which gauges a shopper's desire,measures his means and then charges accordingly.The Internet was supposed to empower consumers,letting them compare deals with the click of a mouse.But it is also supplying retailers with information about their customers that they never had before,along with the technology to use all this accumulated data.While prices have always varied by geography,local competition and whim,retailers were never able to effectively target individuals until the Web."Dynamic pricing is the new reality,and it's going to be used by more and more retailers," said Vernon Keenan,a San Francisco Internet consultant."In the future,what you pay will be determined by where you live and who you are.It's unfair,but that doesn't mean it's not going to happen."

-For the consumer who might have to pay based on "where you live and who you are," perfect price discrimination may feel unfair because it results in a
A) decrease in total welfare.
B) loss of consumer surplus.
C) loss of producer surplus.
D) decrease in deadweight loss.
E) loss of market efficiency.

Quizplus · Accepted Answer

Perfect price discrimination leads to each customer paying their maximum willingness to pay, resulting in no consumer surplus. This can feel unfair to consumers who thought they were getting a good deal and may decrease their total welfare. There may or may not be a loss of producer surplus depending on the specifics of the market. Deadweight loss and market efficiency are not directly affected by perfect price discrimination.

Reflect on the Following Excerpt from a Washington Post Article