Grant Economics Week 4 homework

Grant Economics Week 4 homework - 1. Cigarettes, Orange...

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1. Cigarettes, Orange juice 2. I would have to go with the coffee. This is easier to make more of and charge a higher price for because people “need” their coffee. People don’t “need” their buttered rolls. 3. This is considered price discrimination because it is Peak load pricing. Price discrimination involves the separation of customers into distinct markets. This particular example separates the customers by time. Callers with more of an elastic demand wait ‘till the time when they are charged is closest to their own reservation price. 4. Insurance companies do offer insurance to older people at a higher price. They realize that the older someone is the more likely they will have medical more medical issues and thus must pay a higher premium. It wouldn’t make economic sense to allow older policy holders to have as low of an insurance cost as someone half their age. If this were the case insurance companies would either have to charge the younger policy holders more money to compensate or they would go out of
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Grant Economics Week 4 homework - 1. Cigarettes, Orange...

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