Question

8. Examples of price discrimination Jake and Neha are debating the use of student discounts by local stores near school. Jake argues, "When stores 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." Neha responds with "This is not a form of price discrimination, because there is no age restriction for students." Economists generally agree with

Answer 1

Economists generally agree with Jake

Explanation: Economists often will agree with Jake. Students usually have less income compared to other consumers and thus would not prefer to pay as much for a given good or service. With the offers such as a student price and a non-student price, the business can separating the market into two segments with a higher willingness to pay (i.e. non-students) and lower willingness to pay (i.e. students).