In 1996, Victoria's Secret shipped different catalogs to customers based on their buying habits. Frequent customers received catalogs with lower prices, whereas new customers received catalogs with higher prices for those same items. What is the firm's motivation for practicing price discrimination, despite knowing that if their customers' found out, the company could potentially experience a loss in sales?

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Price discrimination allows the firm to increase profit by charging customers different prices based on their willingness to pay. By charging higher prices to new customers who are less likely to be aware of the firm's lower prices for frequent customers, the company is able to capture additional revenue. This pricing strategy is commonly used by firms to boost profits, but it can be controversial if customers are aware of the price discrimination and feel that it is unfair.

In 1996, Victoria's Secret Shipped Different Catalogs to Customers Based