Question

Becky and Eleen are debating the use of student discounts by local restaurants near school. Becky argues, "When restaurants offer discounts to students with valid identification, it is price discrimination, because they are attempting to separate the market into two groups-each with different demands for that particular good." Eileen responds with, "This is not a form of price discrimination, because there is no age restriction for students." Economists generally agree with

Answer 1

The restaurant is segmenting the market into students
and non-students. Students and non-students have different willingness to pay
for the food in the restaurant and therefore are segmented into two different
groups.
The market is not segmented based on the age demographic and is segmented
based on how much the customer earns. Since students earn less than people who work,
the restaurant has segmented the market into students and non-students.
Economists generally agree with Becky.