1. What should Diana Kelly do?

Diana Kelly should adopt a uniform pricing strategy for all customers, regardless of their
gender. This would have several advantages, such as:
• It would demonstrate social responsibility and fairness, which could enhance the
company's reputation and brand image.
• It would avoid legal risks and potential lawsuits from customers who feel discriminated
against or misled by the price difference.
• It would reduce operational costs and simplify inventory management, as there would
be no need to differentiate the products by gender.
• It would increase customer satisfaction and loyalty, as customers would perceive the
company as transparent and honest.
However, this option also has some drawbacks, such as:
• It would reduce the profit margin and revenue of the company, as the women's version
of the product has a higher demand and elasticity than the men's version.
• It would create a price war with competitors who still charge different prices based on
gender, which could erode the company's market share and profitability.
• It would alienate some customers who prefer to buy products that are tailored to their
gender identity and preferences, which could affect their perceived value and quality of
the product.

2. Would women want the Cream more than men? Why?

To answer this question, we need to consider the factors that influence consumer preferences,
such as income, tastes, expectations, social norms, and marketing strategies women may have
a higher demand for the Cream if they have more disposable income than men, or if they value
the quality and benefits of the product more than men. Women might value the Cream's
branding, packaging or fragrance more than men. Alternatively, women may want the Cream
more than men because of social expectations or pressures to conform to certain beauty
standards, or because of the persuasive effects of advertising and branding that target female
consumers.
3. Would women have higher willingness to pay?
Women might have higher willingness to pay for the Cream than men for the Lotion for similar
reasons as above. Women might perceive the Cream as more effective, desirable or suitable for
their needs and preferences. Women might also be less price-sensitive or more loyal to the
brand than men.
4. List your arguments for and against Pink tax.
Some arguments for Pink tax are:
• It is a rational and efficient way of pricing products according to market forces and consumer
behavior.
• It allows firms to capture more surplus from consumers who have higher demand and
willingness to pay.
• It encourages product differentiation and innovation that cater to diverse customer needs
and preferences.
Some arguments against Pink tax are:
• It is an unfair and discriminatory way of pricing products based on gender stereotypes and
biases.
• It exploits consumers who have less bargaining power or information in the market.
• It creates social and economic inequalities and harms consumer welfare.