Question

Which of the following is an example of price discrimination through tying?

Group of answer choices

Razor handles and blade cartridges.

Left and right shoes.

Cell phones and personalized cases.

Washing machines and laundry detergent.

Answer 1

Solution: Razor handles and blade cartridges

Explanation: Tying is the firm's practice of selling one good which requires the buyer to purchase another of the firm's goods. Tying price discrimination occurs when one product, called the base product, is tied to a second product called the variable product such as razor handles and blade cartridges. The razor handle is a main product while blade cartridges are variable products. Thus the seller sells the razor handles at a high price while cartridges at a low price