Two months after Apple introduced the iPhone in 2007, the company reduced the price from $600 to $400. How is this drop of price an example of price discrimination?
A) Early adopters are less sensitive to price than late adopters.
B) Early adopters have a higher demand than late adopters.
C) Early adopters have a more elastic demand curve than late adopters.
D) It's not an example of price discrimination.

Question

Quizplus · Accepted Answer

Early adopters are typically less sensitive to price, allowing companies to charge them more initially before reducing prices to attract more price-sensitive late adopters.

Two Months After Apple Introduced the IPhone in 2007, the Company