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Principles of Economics 2nd Edition
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CHAPTER 11: Price Discrimination
MULTIPLE CHOICE
1. Price discrimination exists when a firm sells ________ goods at more than one price to ________
groups of customers.
a. different; similar d. identical; different
b. existing; distinct e. limited; restricted
c. discounted; large
ANS: D DIF: Easy REF: What Is Price Discrimination?
OBJ: 11.1 What is price discrimination? MSC: Remembering
2. Price discrimination exists when a firm is able to sell the same good at more than one price to
different groups of
a. producers. d. promoters.
b. firms. e. commodities.
c. consumers.
ANS: C DIF: Easy REF: What Is Price Discrimination?
3. A firm can be identified as practicing price discrimination when

a. consumers engage in comparison shopping to find the lowest advertised price.
b. firms behave as price takers, whereas consumers react with price-making behavior.
c. buyers in a perfectly competitive market are able to influence the prices that firms set.
d. producers pass on differences in costs to those price-conscious consumers willing to buy
in bulk.
e. producers set different prices for distinct groups of consumers, despite selling identical
products to each group.
ANS: E DIF: Easy REF: What Is Price Discrimination?
OBJ: 11.1 What is price discrimination? MSC: Understanding
4. Which of the following best describes price discrimination?

a. charging different prices to different people and the prices are perceived as unfair and
harmful
b. a firm selling the same good at more than one price to different groups of customers
c. when differences in cost are reflected by differences in price
d. commission of an act that is always illegal and not beneficial to buyers or sellers
e. a practice available only to competitive, price-taking firms
ANS: B DIF: Easy REF: What Is Price Discrimination?
5. In 1996, Victoria’s Secret shipped different catalogs to customers based on their buying habits.
Frequent customers received catalogs with lower prices, whereas new customers received catalogs
with higher prices for those same items. Victoria’s Secret was practicing
a. monopolistic competition. d. efficient pricing.
b. reservation pricing. e. price discrimination.
c. price retention.
OBJ: 11.1 What is price discrimination? MSC: Applying
6. A price maker is a firm that
a. sets the prices that the market makes.
b. has a price that covers all of its costs.
c. sets prices that maximize consumer surplus.
d. sets prices equal to that of the market.
e. has some market power.
7. For a firm to be able to practice price discrimination, it must be a

a. price maker. d. price taker.
b. cost producer. e. profit maker.
c. price practitioner.
ANS: A DIF: Easy REF: What Is Price Discrimination?
8. One reason that firms may be unable to utilize price discrimination as a viable strategy is because
a. it is always illegal to price discriminate.
b. firms are unwilling to maximize profits.
c. most consumers’ reservation prices are well publicized.
d. firms are unable to prevent resale of the product they offer for sale.
e. firms are unlikely to increase profits after paying for increased marketing costs.
ANS: D DIF: Easy REF: Conditions for Price Discrimination
9. Which of the following conditions is a requirement for price discrimination?

a. There is no reselling allowed in the market.
b. People have homogenous preferences.
c. Firms face different costs of production.
d. There are multiple firms in the market.
e. There is only one firm in the market.
ANS: A DIF: Easy REF: Conditions for Price Discrimination
10. Price discrimination allows firms to make more money by partitioning their customers into at least
two distinct groups, those who
a. the firm wants to retain as customers and those who will decide to buy elsewhere.
b. have a similar elasticity of demand and those who are unaware of their demand elasticity.
c. will get a discount and those who are willing to pay more.
d. differ from their usual customer type and those with characteristics common to their
customer base.
e. are willing to pay more and those who buy whenever they see the word ‘discount.’
ANS: C DIF: Moderate REF: Conditions for Price Discrimination
11. Which of the following statements is true?

a. Firms that can identify two types of consumers can price discriminate perfectly.
b. Firms can price discriminate only if there is zero competition in the market.
c. Firms that price discriminate will not reach higher profits.
d. Firms that can prevent reselling may be able to engage in price discrimination.
e. Firms can usually price discriminate if they are in a perfectly competitive market.
12. A firm cannot price discriminate if it

a. operates in a competitive environment.
b. has a downward-sloping demand curve.
c. has a business that is regulated.
d. has perfect information about market demand.
e. can prevent resale of its product.
13. Airlines require every passenger with a ticket to have a matching, government-issued photo
identification. Price discrimination is made easier because
a. this practice prevents a passenger who purchased a discounted fare from reselling that
ticket to another customer who is willing to pay more.
b. this practice allows airlines to determine the different personal characteristics of their
buyers at a zero cost.
c. this type of price discrimination is mandated and supported by the federal government.
d. customers acknowledge that they are exchanging higher ticket prices for decreased safety
regulations.
e. customers are then willing to divulge relevant information to the airline about their
reservation price.
14. If a firm is unable to distinguish which of its buyers has inelastic demand and which has a
relatively elastic demand, then the firm will be unable to price discriminate because it will
a. not know how much of the product to offer for sale.
b. not know enough about its customer base to prevent resale.
c. not know which price to charge which customer.
d. not know how many of its customers will buy the product when it is offered for sale.
e. be unable to predict how much of its sales will be retained as profit.
ANS: C DIF: Easy REF: Conditions for Price Discrimination
15. Which of the following is necessary for price discrimination to occur?

a. The firm must be able to produce the good at a low cost.
b. The firm needs to decrease profits.
c. The market allows for reselling goods.
d. Consumers’ preferences are hidden from the firm.
e. The firm is able to distinguish among groups of buyers easily.
ANS: E DIF: Moderate REF: Conditions for Price Discrimination
16. Hotwire.com, an online travel company specializing in cheap and discounted hotel rates and
airfares, often asks customers if their travel dates are flexible when pricing potential bookings.
This practice helps Hotwire.com practice price discrimination by allowing it to
a. easily distinguish between different groups of buyers.
b. book reservations for customers who are most likely to travel before those who are less
likely to travel.
c. post higher prices initially and then lower the price based on room availability.
d. determine which customers are simply comparison shopping and which ones are ready to
make a purchase.
e. offer high prices to customers with flexible travel dates and low prices to those who are on
a fixed income.
Reese Witherspoon plans to visit her hometown of New Orleans, Louisiana. When her assistant
checked the hotel reservation website, there were four published rates available, which are
summarized in the following table. Use this table to answer the following questions:
Best-available rate $289
90-day advance purchase $230
AARP member rate $260
Military/government rate $135
17. The hotel attempts to distinguish between groups of buyers in order to

a. attract buyers who wish to practice conspicuous consumption.
b. assign prices based on the differing price elasticities of demand.
c. control the rising costs of hotel ownership.
d. appear to offer choices to the consumer.
e. deter last-minute reservations.
ANS: B DIF: Easy REF: Conditions for Price Discrimination
18. Why would the hotel require a guest to provide appropriate identification to receive the American
Association of Retired Persons (AARP) member rate, the military rate, or the government rate?
a. to prevent resale of discounted rooms to other buyers who are not eligible for the
discounted price
b. to honor those who serve in the military and offer support to the troops
c. to encourage active membership in AARP
d. to ensure that distinguished government guests are assigned the appropriate costs
e. to limit the number of patrons who receive each type of rate
Use the following excerpt from a campus-wide announcement about a concert at the University of
West Georgia (UWG) to answer the following questions:
The Band Perry [a Grammy-nominated country music act] will perform live at the University of
West Georgia Coliseum on Sunday, April 22, as part of its Purveyors of Performance Tour
2012 . . . Prices are $10 in advance or $15 on the day of the show for those with a UWG [Student]
ID, and $20 in advance or $25 on the day of the show for the general public.
Source: “CAMPUS NEWS: The Band Perry Comes to UWG,” UWG media (blog), UWG Center for Student
Involvement, April 19, 2012, http://uwgmedia.blogspot.com/2012/04/band-perry-comes-to-uwg_19.html.
19. Which price discrimination condition was satisfied by requiring students to show an ID card for an
initial ticket purchase?
a. The concert promoter was able to encourage the resale of the product or service to another
student.
b. The concert promoter was able to distinguish easily among groups of buyers with different
price elasticities of demand.
c. The concert promoter was able to prevent the resale of the product or service to another
consumer who is willing to pay more.
d. The concert promoter was able to distinguish easily among groups of sellers with different
price elasticities of supply.
e. The concert promoter was able to distinguish easily between true fans of the Band Perry
and those who just wanted to see a cheap concert.
ANS: B DIF: Moderate REF: Conditions for Price Discrimination
20. Why would the Center for Student Involvement complicate the ticket-pricing scheme by using four
different ticket prices?
a. to see how many students will support an on-campus event
b. to keep the general public out of the rowdier student section on the concert floor
c. to separate the concert attendees into distinct groups so that they can maximize profit
d. to ensure that enough people attend the concert so that they minimize any potential loss
e. to gauge student interest in case the concert must be canceled and rescheduled to
maximize profit
ANS: C DIF: Moderate REF: Price Discrimination on Campus
OBJ: 11.2 How is price discrimination practiced? MSC: Applying
21. In the past, the University of Georgia (UGA) sold enrolled students a pack of paper tickets that
granted them discounted access to all home football games. Recently, the university changed its
policy to the following: “Student tickets will be inscribed on your valid UGA ID. There will be no
physical tickets for home games.” This rule change was most likely implemented to
a. encourage greater student attendance at home football games and thus gain higher profits.
b. keep students from actively practicing price discrimination at sporting events.
c. prevent students from reselling their discounted tickets to other buyers who are willing to
pay full price for their tickets.
d. prevent ticket scalpers from being less willing to engage in price discrimination or other
illegal activities near college campuses.
e. promote the use of a technological advance in card inscribing in order to avoid the
negative externalities associated with the overprinting of paper materials.
22. Firms are most likely to engage in price discrimination if

a. the goods can be resold in the market without any loss in value or quality.
b. the goods can be resold in the market, but there is a large loss in the value or quality of the
product.
c. the goods cannot be resold in the market.
d. consumers all have a similar reservation price for the goods produced.
e. consumers of all ages have similar preferences for the goods produced.
ANS: C DIF: Easy REF: Conditions for Price Discrimination
OBJ: 11.1 What is price discrimination? MSC: Evaluating
23. Despite the gain from higher profits, firms are not always able to price discriminate because
a. they are unable to partition their customers into distinct groups.
b. it is always illegal to price discriminate in the United States.
c. they already hold a large degree of market power.
d. they already provide their goods at the lowest-possible prices.
e. they can easily determine each customer’s reservation price.
24. Price discrimination can help improve efficiency in the market because goods are sold to more
people, thus increasing profits. If all consumers have the same tastes, will a firm be able to price
discriminate?
a. yes, because the market is homogeneous
b. yes, as long as reselling is prohibited in the market
c. no, because the firm will not be able to distinguish among groups of consumers
d. no, because the similarities among consumers will lead to collusion among buyers
e. yes, because there will be a monopoly in the market (because all consumers want to
purchase the same goods and services)
25. An executive, a surfer, and a schoolteacher each decide to fly from Atlanta, Georgia, to Honolulu,
Hawaii. The schoolteacher can travel only during the months of June and July. The executive must
travel in May for a meeting with her overseas board of directors. The surfer can travel anytime
during the calendar year, but he faces a limited budget. The lowest airfare for each month is
summarized in the following table. Assuming that the airline faces a constant cost of production
each month for a flight, why is it beneficial for the airline to charge different prices each month?
January $804
February $804
March $843
April $843
May $1,052
June $943
July $949
August $829
September $804
October $804
November $829
December $829
a. The airline wants to attract more business executives as customers.

b. Because the airline is able to separate its customers into distinct groups—those who must
travel during the summer months and those who can travel any time of the year—it is able
to price discriminate and enjoy higher profits.
c. The airline wants to restrict the number of customers who fly on a limited budget because
it makes less profit on those ticket sales.
d. Many schoolteachers travel with their families, so airlines prefer to make ticket prices
reasonable for them.
e. Because surfers often travel with oversized luggage, airlines want to make ticket prices
attractive to these customers so that the airline can claim the extra baggage fees.
26. Internet service providers such as Comcast are able to price discriminate easily for many reasons.
Which of the following is a reason for them to price discriminate?
a. They offer better services than the competition.
b. They can easily identify new customers from old customers.
c. They let the customers choose from different packages based on income.
d. There are many competitors providing Internet services.
e. Some companies offer additional services such as cable and phone.
27. Firms engage in legal price discrimination if they

a. charge different prices for the same good based on tastes.
b. charge different prices for the same good based on race.
c. charge different prices for the same good based on the locational costs associated with
producing the good.
d. charge the same prices to all.
e. never reveal their pricing plan to ineligible customers.
ANS: A DIF: Moderate REF: Conditions for Price Discrimination
28. The main reason firms cannot price discriminate under perfect competition is because
a. firms are price takers and cannot set prices for their goods.
b. firms cannot identify different kinds of consumers perfectly.
c. some goods are being resold in the market.
d. there is a lot of heterogeneity among consumers’ tastes.
e. all firms share the same production technology.
ANS: A DIF: Moderate REF: What Is Price Discrimination?
29. Price discrimination allows businesses to make additional profits and allows markets to work more
a. equitably. d. realistically.
b. efficiently. e. unfairly.
c. independently.
ANS: B DIF: Moderate REF: The Welfare Effects of Price Discrimination
30. One benefit of price discrimination is that

a. firms are able to provide goods to consumers at a consistent price.
b. some consumers are able to buy the product at a lower price than would otherwise exist.
c. all consumers are able to gain monopsony power.
d. most firms minimize revenue.
e. it exists only in theory, not in the real world.
ANS: B DIF: Moderate REF: One Price versus Price Discrimination
Reflect on the following excerpt from a Washington Post article about dynamic pricing by online
retail giant Amazon.com and answer the following questions:
Few things stir up a consumer revolt quicker than the notion that someone else is getting a better
deal. That’s a lesson Amazon.com has just learned. Amazon, the largest and most potent force in
e-commerce, was recently revealed to be selling the same DVD movies for different prices to
different customers. It was the first major Web test of a strategy called “dynamic pricing,” which
gauges a shopper’s desire, measures his means and then charges accordingly. The Internet was
supposed to empower consumers, letting them compare deals with the click of a mouse. But it is
also supplying retailers with information about their customers that they never had before, along
with the technology to use all this accumulated data. While prices have always varied by
geography, local competition and whim, retailers were never able to effectively target individuals
until the Web. “Dynamic pricing is the new reality, and it’s going to be used by more and more
retailers,” said Vernon Keenan, a San Francisco Internet consultant. “In the future, what you pay
will be determined by where you live and who you are. It’s unfair, but that doesn’t mean it’s not
going to happen.”
Source: David Streitfeld, “On the Web, Price Tags Blur: What You Pay Could Depend on Who You Are,” Washington
Post, September 27, 2000, A1.
31. The producer, who can charge each customer according to his or her willingness to pay for a
product, can
a. minimize producer surplus by using price discrimination.
b. maximize consumer surplus by using perfect price prejudice.
c. minimize market efficiency by using two-tiered price discrimination.
d. maximize profits by using perfect price discrimination.
e. minimize loss by using perfect price determination.
ANS: D DIF: Moderate REF: The Welfare Effects of Price Discrimination
32. For the consumer who might have to pay based on “where you live and who you are,” perfect price
discrimination may feel unfair because it results in a
a. decrease in total welfare. d. decrease in deadweight loss.
b. loss of consumer surplus. e. loss of market efficiency.
c. loss of producer surplus.
33. Firms engage in price discrimination primarily to

a. avoid a harmful activity. d. keep prices hidden.
b. retain monopoly power. e. make additional profits.
c. use customers efficiently.
ANS: E DIF: Easy REF: The Welfare Effects of Price Discrimination
34. A firm that is able to differentiate between each of its customers by selling the same good at a
unique price to each customer is practicing ________ discrimination.
a. reservation price d. idealized price
b. perfect price e. exclusive price
c. inelastic demand
ANS: B DIF: Easy REF: One Price versus Price Discrimination
35. Perfect price discrimination exists when a firm sells ________ good at a unique price to ________.
a. a complementary; each group of buyers
b. a similar; most of its customers
c. a substitute; different customers
d. a discounted; a few of its customers
e. the same; each customer
ANS: E DIF: Moderate REF: One Price versus Price Discrimination
36. Perfect price discrimination occurs when a firm is able to

a. charge each buyer the highest price that he or she is willing to pay for the good.
b. identify at least two different groups of buyers.
c. determine the difference between a seller’s reservation price and the buyer’s reserve price.
d. prevent frequent reselling of its product.
e. determine the prices that should be charged to generate the largest amount of consumer
surplus.
ANS: A DIF: Moderate REF: One Price versus Price Discrimination
37. Cart Vader is a new business venture aimed toward selling golf carts to be used as neighborhood
recreational vehicles. The new Cart Vader business owner is uncertain about what price to charge
for the golf carts. After consulting with multiple sources, the owner has decided to set a high
sticker price, but to allow potential buyers to negotiate down to their individual reservation price.
The business owner is attempting to practice
a. reservation price discrimination. d. perfect price discrimination.
b. perfect price maximization. e. consumer price preservation.
c. potential price segmentation.
ANS: D DIF: Easy REF: One Price versus Price Discrimination
38. In New York City’s Chinatown, tourists flock to shops to buy souvenirs from local retailers. Each
store sells similar items, but each salesperson tries to determine a customer’s reservation price
before reaching a deal. In this scenario, the salesperson is attempting
a. perfect price discrimination. d. to maximize buyer behavior.
b. to minimize producer loss. e. price-taking discrimination.
c. to minimize consumer loss.
39. Which of the following is a real-world example of an attempt at perfect price discrimination?
a. a restaurant’s blue plate special
b. a discount on preinstalled computer software
c. a car dealership selling an automobile
d. a college’s varying tuition rates, depending on state of residence
e. an advertisement for “buy one, get one free” pizza before 3:00 P.M.
ANS: C DIF: Easy REF: One Price versus Price Discrimination
40. Suppose two brothers own identical skydiving companies but have decided to experiment with
different pricing structures. The older brother’s company, Air Adventures, sets its prices using the
profit-maximizing rule, while the younger brother’s company, Sky Warriors, sets its prices using a
two-tiered, price-discrimination model. Assuming that both companies face the same market
demand curves, marginal costs, and costs of production, and wield significant market power for
their service area, which of the following is most likely to occur?
a. Air Adventures will generate a similar net revenue to Sky Warriors.
b. Sky Warriors will generate a higher net revenue than Air Adventures.
c. Sky Warriors will generate a lower net revenue than Air Adventures.
d. Air Adventures will generate a higher net revenue than Sky Warriors.
e. Sky Warriors will eventually switch to the Air Adventures model.
Qcue is a software-based dynamic pricing management company that has developed software to
assist professional and collegiate sports teams in increasing their ticket sales by practicing
near-perfect price discrimination. Use the following excerpt from a Forbes article about the
company to answer the following questions:
Dynamic pricing will become much more prevalent in both professional and collegiate sports over
the next few years. . . . In an industry where the demand across games tends to be dissimilar for a
plethora of reasons—some predictable, yet some spurious—it only makes sense that the pricing of
sports tickets should allow teams the ability to price their inventory in the most efficient way
possible. . . . “Accurately pricing tickets is a very difficult process,” says Barry Kahn, the CEO of
Qcue. “In the initial stages, we had both technical and emotional barriers to overcome. We were
changing the way things had been done for so many years, moving from pricing tickets 9 months
out and keeping them static, to allowing the price to flex right up until the first pitch. That meant
educating those in charge of ticketing operations as well as the fans.” . . . In 2009, Qcue had one
client. In 2010, they were working with three teams. Today their roster includes 30+ teams across
MLB, MLS, NHL and NBA.
Source: Patrick Rishe, “Dynamic Pricing: The Future of Ticket Pricing in Sports,” Forbes, January 6, 2012,
http://www.forbes.com/sites/prishe/2012/01/06/dynamic-pricing-the-future-of-ticket-pricing-in- sports/.
41. Another market that is well-known for this practice is the market for
a. airline tickets. d. economics textbooks.
b. secondary education. e. college dorm rooms.
c. online music.
ANS: A DIF: Easy REF: One Price versus Price Discrimination
42. When teams are able to change ticket prices minute to minute based on demand, they are
attempting to
a. discount tickets to their most loyal fans.
b. transfer surplus from consumers to producers.
c. prevent the resale of tickets through ticket reselling websites like StubHub.
d. confuse the fans of their rivals in order to gain a home-field advantage.
e. break down the technical and emotional barriers that exist between fans and team owners.
Use the following information to answer the following questions: The accompanying figure depicts
the demand (D) curve for general admission concert tickets to see ECON-Jammin’, the world’s
first economics rock band, which is scheduled to visit your city next month. The concert venue can
accommodate 100 fans with a marginal cost (MC) of $10 per person.
43. If ECON-Jammin’ charges a single price for its concert tickets and follows the profit-maximizing
rule for a monopoly, what will be the price that is charged per ticket?
a. $50 d. $35
b. $45 e. $30
c. $40
OBJ: 11.1 What is price discrimination? MSC: Analyzing
44. If ECON-Jammin’ charges a single price to see the band in concert and follows the
profit-maximizing rule for a monopoly, how many people will attend the concert?
a. 50 d. 20
b. 40 e. 10
c. 30
ANS: D DIF: Moderate REF: One Price versus Price Discrimination
45. If ECON-Jammin’ charges a single price to see the band in concert and follows the
profit-maximizing rule for a monopoly, how much net revenue will be generated?
a. $1,600 d. $350
b. $600 e. $200
c. $400
ANS: C DIF: Easy REF: One Price versus Price Discrimination
46. ECON-Jammin’ has recently discovered that its fans are made up of two distinct groups that can be
easily distinguished. The band has decided to utilize its economic knowledge and offer a
high-priced ticket of $40 per person and a low-priced ticket of $20 per person. Based on this
information, what is the net revenue earned by the sales of the high-priced ticket?
a. $500 d. $200
b. $300 e. $150
c. $250
information, what is the profit earned by the sales of the low-priced ticket?
a. $200 d. $500
b. $300 e. $600
c. $400
information, what is the gain in net revenue from using price discrimination versus a single-price
model?
a. $200 d. $50
b. $150 e. $0
c. $100
Consider the following scenario to answer the following questions: EJH Cinemas, a movie theater
next to your university, attracts two types of customers—those who are associated with the
university (students, faculty, and staff) and locals who live in the surrounding area. There are
10,000 university customers interested in purchasing movie tickets from EJH Cinemas, with a
maximum willingness to pay of $7 per ticket. There are 20,000 local customers interested in
purchasing tickets, with a maximum willingness to pay of $9 per ticket. The movie theater incurs a
constant marginal cost of $4 per ticket. For simplicity, assume each customer purchases, at most,
one ticket.
49. What will be the amount of EJH Cinemas’ total revenue if the price is $7 per ticket?
a. $250,000 d. $140,000
b. $210,000 e. $105,000
c. $180,000
50. What is the amount of consumer surplus if the price is $7 per ticket?
a. $120,000 d. $40,000
b. $90,000 e. $0
c. $80,000
51. What will be the amount of EJH Cinemas’ total revenue if the price is $9 per ticket?
a. $250,000 d. $140,000
b. $210,000 e. $105,000
c. $180,000
ANS: C DIF: Moderate REF: One Price versus Price Discrimination
52. What is the amount of consumer surplus if the price is $9 per ticket?
a. $120,000 d. $40,000
b. $90,000 e. $0
c. $80,000
53. If EJH Cinemas decides to practice price discrimination, charging $9 for a standard ticket available
to everyone, but only $7 for a ticket if you show your university identification (students, faculty,
and staff), what will be the movie theater’s total revenue?
a. $250,000 d. $170,000
b. $200,000 e. $150,000
c. $180,000
54. If EJH Cinemas decides to practice price discrimination, charging $9 for a standard ticket available
to everyone, but only $7 for a ticket if you show your university identification (students, faculty,
and staff), what will be the amount of consumer surplus?
a. $0 d. $20,000
b. $5,000 e. $25,000
c. $15,000
Consider the following scenario to answer the following questions: The Varsity, located in
downtown Atlanta, is the world’s largest drive-in restaurant. Located near the Georgia Tech
campus, the drive-in attracts two distinct types of customers—college students and visitors to
Atlanta. The owners are considering offering a student discount of $1 off their combo meal, which
is regularly priced at $9. There are 5,000 students interested in purchasing a combo meal, with a
maximum willingness to pay of $8. There are 5,000 visiting customers interested in purchasing the
combo meal, with a maximum willingness to pay of $9. Assume that each customer, at most, will
purchase a single meal and the marginal cost is $5.
55. What will be the amount of the Varsity’s total revenue before the offer of a student discount when
the single price of $9 per combo meal goes into effect?
a. $90,000 d. $45,000
b. $85,000 e. $35,000
c. $60,000
56. What is the amount of total consumer surplus if the Varsity offers the combo meal at the single
price of $9 per meal?
a. $20,000 d. $5,000
b. $15,000 e. $0
c. $10,000
57. What will be the amount of total revenue for the Varsity if the owners offer a single price of $8 per
combo meal?
a. $90,000 d. $65,000
b. $85,000 e. $40,000
c. $80,000
58. What is the difference in the amount of total consumer surplus if the Varsity offers the combo meal
at the single price of $8 per combo meal instead of the previous single price of $9 per combo
meal?
a. no change d. $10,000 increase
b. $16,500 decrease e. $5,000 increase
c. $15,000 decrease
59. If the Varsity decides to practice price discrimination, what will be its total revenue if it charges
most customers $9 for a standard combo meal, but charges a reduced price of $8 for only those
customers who show their student identification cards?
a. $95,000 d. $80,000
b. $90,000 e. $75,000
c. $85,000
60. If the Varsity decides to practice price discrimination, what will be the amount of consumer
surplus if it charges most customers $9 for a standard combo meal, but charges a reduced price of
$8 for only those customers who show their student identification cards?
a. $0 d. $2,500
b. $500 e. $5,000
c. $1,000
61. Which of the following examples is the closest to perfect price discrimination?
a. nontransferable goods that are sold in an auction
b. Internet-access package deals for new and old customers
c. monthly versus daily bus tickets
d. daily deals in an electronics store
e. clubs offering waived cover charges for “ladies night”
62. Mirabella Creations is a custom jewelry company that specializes in unique, handmade, wearable
artwork. Each piece of jewelry offered for sale is made after an extensive customer consultation
that results in a one-of-a-kind piece of heirloom jewelry. To maximize profits, the firm owner
should charge
a. the same price to all customers.
b. the price that the market will bear.
c. a price that will cover the firm’s fixed costs.
d. a price that is close to each customer’s willingness to pay.
e. a price that is competitive with mass-market jewelers available in their service area.
Refer to the following table to answer the following questions:

Willingness to Pay for Bottled Water
Quantity City A City B City C
1 $20 $15 $14
2 $17 $13 $13
3 $14 $11 $12
4 $11 $9 $11
5 $8 $7 $10
Marginal Cost = $0
63. Liza is the only provider of bottled water for three cities. Because she has access to a natural
spring, the marginal cost to produce an additional bottle is $0. How many bottles of water would
Liza need to produce to maximize her profits and at what price would she sell it?
a. 111 bottles at $11 each d. 88 bottles at $12 each
b. 10 bottles at $10 each e. 115 bottles at $7 each
c. 115 bottles at $7 each
ANS: A DIF: Difficult REF: One Price versus Price Discrimination
64. Kenneth is the only provider of bottled water for three cities. Because he has access to a natural
spring, the marginal cost to produce an additional bottle is $0. If he could price discriminate by
charging a different price in each city, how many more people would have access to bottled water
compared to when he charges only one price for all three cities?
a. one more person d. four more people
b. two more people e. exactly the same number of people
c. three more people
ANS: B DIF: Difficult REF: One Price versus Price Discrimination
65. Isabelle is the only provider of bottled water for three cities. Because she has access to a natural
spring, the marginal cost to produce an additional bottle is $0. As she knows, firms discriminate to
improve profits. How much would her firm earn in additional profit if she practiced price
discrimination across cities, charging a different price in each city versus charging everyone a
single price?
a. $9 d. $30
b. $10 e. $5
c. $20
66. Kaleb is the only provider of bottled water for three cities. Because he has access to a natural
spring, the marginal cost to produce an additional bottle is $0. Imagine he could price discriminate
perfectly in this market. How much more profit would his firm earn if he practiced perfect price
discrimination instead of practicing imperfect price discrimination (charging different prices in
each city)?
a. $55 d. $20
b. $30 e. $10
c. $25
67. Perfect price discrimination transfers the gains from trade from ________, but it also creates
maximum efficiency.
a. firms to buyers d. producers to consumers
b. consumers to producers e. monopolies to profit-maximizing firms
c. corporations to sole proprietorships
68. For the companies that are able to engage in price discrimination, the practice
a. is profitable.
b. increases the welfare of consumers.
c. is sometimes inefficient for the market.
d. is difficult to maintain over the long run.
e. decreases the welfare of producers.
ANS: A DIF: Moderate REF: The Welfare Effects of Price Discrimination
69. The reason economists use the term “perfect” for firms that are able to charge each customer a
price exactly equal to the price the customer is willing to pay is because it
a. is a perfect example of capitalism.
b. always works perfectly, just like the theoretical model.
c. describes a market outcome that produces no deadweight loss.
d. charges each customer his or her own perfect price.
e. works perfectly to benefit the producers selling the product.
ANS: C DIF: Moderate REF: The Welfare Effects of Price Discrimination
70. Suppose the market for golf clubs has moved from a perfectly competitive market to one that is
completely dominated by firms practicing perfect price discrimination. Which of the following
statements is true about the change in welfare?
a. The change creates a deadweight loss.
b. Society’s total welfare is zero after the change.
c. There is a decrease in deadweight loss accompanied by a decrease in producer surplus.
d. Some surplus has been lost to society, but consumers are better-off overall.
e. All of the surplus previously enjoyed by consumers has been shifted to producers.
ANS: E DIF: Moderate REF: The Welfare Effects of Price Discrimination
71. When a market model moves from that of a monopoly to one in which perfect price discrimination
is practiced, the deadweight loss
a. increases.
b. remains unchanged.
c. can increase or decrease depending on the type of loss.
d. decreases.
e. fluctuates.
ANS: D DIF: Moderate REF: The Welfare Effects of Price Discrimination
72. Despite creating maximum market efficiency, perfect price discrimination is often disliked by
consumers because it transfers the gains in trade from
a. consumers to producers. d. buyers to consumers.
b. producers to consumers. e. firms to buyers.
c. firms to producers.
73. One of the benefits of perfect price discrimination over a monopoly is that it can increase
a. marginal welfare. d. cost of production.
b. total welfare. e. marginal cost.
c. average welfare.
74. In 1996, Victoria’s Secret shipped different catalogs to customers based on their buying habits.
Frequent customers received catalogs with lower prices, whereas new customers received catalogs
with higher prices for those same items. What is the firm’s motivation for practicing price
discrimination, despite knowing that if its customers found out, the company could potentially
experience a loss in sales?
a. Price discrimination increases profit.
b. Reservation pricing decreases cost.
c. Price determination offsets risk.
d. Efficient pricing clears the market.
e. Price discrimination decreases deadweight loss.
The following figure depicts a generalized downward-sloping market demand (D) curve for a
product. It also shows the firm’s relevant marginal revenue (MR) curve and marginal cost (MC)
curve. Refer to this figure to answer the following questions:
75. For a perfectly competitive market, which of the following areas would be designated as consumer
surplus?
a. A d. A + B
b. B e. A + B + C
c. C
76. For a monopoly that charges a single price of P1, which of the following areas would be designated
as consumer surplus?
a. A d. A + B
b. B e. There is no consumer surplus.
c. C
77. If the firm can price discriminate perfectly, which of the following areas would be designated as
consumer surplus?
a. A d. A + B
b. B e. There is no consumer surplus.
c. C
78. For a perfectly competitive market, which of the following areas would be designated as
deadweight loss?
a. A d. A + B
b. B e. There is no deadweight loss.
c. C
79. For a monopoly that charges a single price of P1, which of the following areas would be designated
as deadweight loss?
a. A d. A + B
c. C
80. If the firm can perfectly price discriminate, which of the following areas would be designated as
deadweight loss?
a. A d. A + B
c. C
The following figure depicts a generalized downward-sloping market demand (D) curve for a
product. It also shows the firm’s relevant marginal revenue (MR) curve and marginal cost (MC)
curve. Use this figure to answer the following questions:
81. For a perfectly competitive market, what would the producer surplus be?
a. $160 d. $40
b. $120 e. $0
c. $80
82. For a monopoly that charges a single price of $6, what would the producer surplus be?
a. $160 d. $40
b. $120 e. $0
c. $80
83. If the firm can price discriminate perfectly, what would the producer surplus be?
a. $160 d. $40
b. $120 e. $0
c. $80
84. If the firm moves from a perfect competition model to a monopolist model that charges a single
price of $6, there would be ________ in total welfare.
a. a loss of $160 d. a gain of $120
b. a gain of $80 e. no change
c. a loss of $40
85. If the firm moves from a perfect price-discrimination model to a perfect competition framework,
there would be ________ in total welfare.
b. a gain of $80 e. no change
c. a loss of $40
86. If the firm moves from a monopolist model that charges a single price to a perfect competition
model, there would be ________ in total welfare.
b. a loss of $80 e. no change
c. a gain of $40
The following figure depicts the downward-sloping market demand (D) curve for a five-day
western Caribbean cruise on Carnival Cruise Lines. The price (P) is per person in U.S. dollars,
and the quantity (Q) is the number of passenger tickets sold. This figure also shows the company’s
relevant marginal revenue (MR) curve and marginal cost (MC) curve. Use this figure to answer
the following questions:
87. If Carnival Cruise Lines moves from a monopolist model that charges a single price to a perfect
price-discrimination model, there would be a ________ in total welfare.
a. gain of $800,000 d. loss of $1.2 million
b. loss of $400,000 e. gain of $1.2 million
c. gain of $400,000
88. If Carnival Cruise Lines moves from a perfect price-discrimination model to a monopolist model
that charges a single price, there would be a ________ in total welfare.
a. gain of $800,000 d. loss of $1.2 million
b. loss of $400,000 e. gain of $1.2 million
c. gain of $400,000
89. If this cruise line faces a perfectly competitive market, its consumer surplus would be
a. $400,000. d. $1.2 million.
b. $600,000. e. $1.6 million.
c. $800,000.
90. If this cruise line is a monopoly that charges a single price of $600 per passenger, what is the
amount of consumer surplus?
a. $400,000 d. $1.2 million
b. $600,000 e. $1.6 million
c. $800,000
91. In the movie Legally Blonde, a sales associate at an exclusive boutique store attempts to convince
the main character to pay full price for a dress that was on the clearance rack because the
salesperson incorrectly believes that the buyer is uninformed about the quality of the product and
has an inelastic demand (she has a function to attend that same evening). In this case, the
salesperson is attempting to practice perfect
a. sales tactics. d. price discrimination.
b. competition. e. producer surplus.
c. product management.
92. An outlet mall tends to be more attractive to shoppers who have

a. inelastic supply. d. elastic supply.
b. elastic demand. e. unit-elastic demand.
c. inelastic demand.
Refer to the following table. Imagine there are two cities (City A and City R) and you are the only
provider of ice cream sandwiches for both. Use this information to answer the following questions:
Maximum Willingness to Pay (MWP) for Ice
Cream Sandwiches
City A MWP City R MWP
Aladdin $16 Richard $15
Alan $12 Ramon $14
Alvin $10 Robert $13
Albert $8 Roger $11
Albus $6 Reginald $4
Note: Unit cost is $7 for each ice cream sandwich.
93. If a company is a profit-maximizing firm and can charge a single price in both cities, how much
would its profit be?
a. $6 d. $60
b. $20 e. $64
c. $25
ANS: C DIF: Difficult REF: The Welfare Effects of Price Discrimination
94. Because both cities are located quite far from each other, a company can charge different prices in
each without fear of reselling. What prices would it charge in each city?
a. $8 in City A and $11 in City R d. $10 in City A and $11 in City R
b. $12 in City A and $13 in City R e. $4 in City A and $6 in City R
c. $7 in City A and $7 in City R
ANS: B DIF: Difficult REF: The Welfare Effects of Price Discrimination
95. Because both cities are located quite far from each other, a company can charge different prices in
each without fear of reselling. How much more would it earn in profit by charging two different
prices compared to charging everyone only one price?
a. $4 d. $1
b. $3 e. $0
c. $2
96. It is very hot today, and the ice cream sandwiches melt quickly after Chanel takes them out of the
cooler. This gives her the advantage of being able to sell each ice cream at a different price for
each person in both cities. How many ice cream sandwiches would Chanel sell in both cities?
a. 10 d. 5
b. 8 e. 4
c. 7
97. If an individual could charge a different price to each consumer in both cities (perfect price
discrimination), how much more would this person earn compared to when he or she can charge a
single price to everyone (monopoly)?
a. $40 d. $18
b. $39 e. $10
c. $35
ANS: D DIF: Difficult REF: The Welfare Effects of Price Discrimination
98. Which consumers would not purchase any ice cream sandwiches if the firm decides to price
discriminate and charge a different price in each city?
a. Alvin, Albert, and Roger
b. Albus and Reginald
c. Alvin, Albert, Albus, Roger, and Reginald
d. Robert and Reginald
e. Robert and Albus
The following table summarizes six potential customers’ ages and willingness to pay for a solo
skydiving experience from SkyMasters. The aircraft has room for eight people, including the pilot
and skydiving instructor. The marginal cost of adding each additional passenger is $100.
SkyMasters holds significant market power for its region. Use this information to answer the
following questions:
Customer Maximum Willingness to Pay Age
Harold $400 50
Leslie $350 42
Jay $300 45
Kristen $250 21
Ivana $200 20
Matt $150 18
99. Assume that SkyMasters follows the profit-maximizing rule and that the company can charge only
one price. What should that price be?
a. $400 d. $250
b. $350 e. $200
c. $325
100. Assume that SkyMasters follows the profit-maximizing rule and that the company charges a single
price for skydiving. Which potential customer(s) will not purchase a skydiving experience?
a. Harold and Leslie d. Harold
b. Kristen and Jay e. Matt
c. Matt and Ivana
101. Assume that SkyMasters follows the profit-maximizing rule and that the company charges a single
price for skydiving. What would the company’s total revenue be?
a. $1,650 d. $900
b. $1,500 e. $600
c. $1,000
102. Assume that SkyMasters follows the profit-maximizing rule and the company charges a single
price for skydiving. What would the company’s profit be?
a. $1,050 d. $600
b. $1,000 e. $550
c. $700
103. If SkyMasters could charge two different prices based on the age of the customer, what would
those prices be?
a. $300 and $200 d. $400 and $200
b. $350 and $200 e. $250 and $100
c. $400 and $150
ANS: A DIF: Difficult REF: The Welfare Effects of Price Discrimination
104. SkyMasters has decided to charge two different prices, a high price and a low price, based on age.
Customers ________ would pay the higher price.
a. over the age of 50 d. under the age of 21
b. age 40 and over e. over the age of 16
c. age 21 and over
105. SkyMasters has decided to charge two different prices, a high price and low price, based on age.
What would be the increase in total revenue the company gains from its practice of price
discrimination versus what it would earn if it charged a single price to all customers?
a. $1,300 d. $300
b. $1,200 e. $100
c. $650
106. If SkyMasters decides to price discriminate based on age, which customer(s) will not skydive
based on the price that should be offered to that particular age group?
a. Jay d. Matt
b. Harold and Jay e. Ivana
c. Kristen and Harold
107. An example of price discrimination is when

a. movie theaters do not allow children into R-rated movies without a parent or guardian.
b. you can purchase a new PC for half the price of a new Mac, even though they are both
computers.
c. Procter & Gamble charges $9 for a bottle of Tide laundry detergent, while the store brand
costs the consumer significantly less, despite being somewhat similar products.
d. out-of-state students pay more for the same education as in-state students.
e. a grocery store charges $3.00 for a box of Froot Loops on Tuesday, but charges $2.80 for
a box of Froot Loops on Wednesday.
ANS: D DIF: Moderate REF: What Is Price Discrimination?
108. When a nightclub advertises “ladies night” and allows women to enter the club without a cover
charge (whereas men are still required to pay an entrance fee), the club is charging different prices
in an attempt to
a. attract the best clientele and build a reputation as an exclusive club.
b. discriminate between those who are willing to pay for entry and those who have an
inelastic demand for an active nightlife.
c. appeal to different segments of its customer base by allowing certain groups to sometimes
gain free entry.
d. offset the surplus of single men who tend to discriminate between nightclubs based on
price.
e. price discriminate, which maximizes the amount of money the club can receive from its
customers.
ANS: E DIF: Moderate REF: What Is Price Discrimination?
109. Many electronic brands such as Apple, Hewlett-Packard, and Epson typically offer refurbished
products at lower prices. In this case, these companies are
a. not discriminating prices because the refurbished products are different from the new
products.
b. price discriminating because they offer a similar product at a lower price.
c. price discriminating because they offer those discounts only online.
d. not discriminating because people can buy the same products in retail stores.
e. not discriminating because they are price takers, not price makers.
ANS: A DIF: Moderate REF: What Is Price Discrimination?
110. Evening showtimes are more popular with moviegoers. Movie theaters discount afternoon ticket
prices in order to sell more tickets during the daytime hours. Unlike the customers who go to the
movies in the evenings, the afternoon customers tend to be
a. retirees who have already paid for many movies over their lifetimes.
b. stay-at-home parents who have relatively inelastic demand compared to the rest of the
moviegoing population.
c. movie theater employees who could sneak in and see the movie for free; the low price
deters such deceptive behavior.
d. retirees, people on vacation, and those who do not work during the day and who tend to
have more price-elastic demands.
e. people who work or attend school and must be presented with a low price to offset their
high opportunity cost of calling in sick for work or school.
ANS: D DIF: Moderate REF: Price Discrimination at the Movies
OBJ: 11.2 How is price discrimination practiced? MSC: Understanding
111. Concession pricing in movie theaters separates moviegoers into what distinct groups?
a. those who want to eat while watching movies and those who do not
b. moviegoers who value snacks over being caught engaging in the illegal activity of
smuggling in snacks
c. free-riders who would rather eat their friend’s popcorn instead of buying their own
d. revenue-building nonsnackers who attend more movies on average than those who
purchase concessions
e. a price-inelastic group of nonsnackers and snack smugglers and a price-elastic group of
concession area snackers
ANS: A DIF: Moderate REF: Price Discrimination at the Movies
112. Senior citizens typically receive many discounts in movie theaters, among other places, because
they
a. have very elastic demands.
b. are poorer than the average population.
c. have very inelastic demands.
d. can be distinguished easily from other types of consumers.
e. are retired and don’t work anymore.
113. In the research paper “Personalized Dynamic Pricing of Limited Inventories” by Aydin and Ziya
(2007), the authors note that
[I]mplementing personalization [with regard to pricing] to such a full extent may be impractical.
Instead, a seller may want to use a personalization strategy where there is an announced price and single
discount level that can possibly be offered to a customer depending on the signal from the customer.
Source: G. Aydin and S. Ziya, “Personalized Dynamic Pricing of Limited Inventories,” Operations Research 57, no. 6
(November/December 2009): 1523–1531.
An everyday example of this would be a discount on
a. movie tickets when the customer signals that he or she is single.
b. movie tickets when the customer signals that he or she is a student.
c. Twilight movie tickets when the customer signals that he or she is a Twilight fan.
d. Avengers movie tickets when the customer signals that he or she is a silent-film fan.
e. concessions when the customer signals that he or she is on a diet.
ANS: B DIF: Moderate REF: Price Discrimination at the Movies
114. A campus financial aid office uses what tool to separate students into distinct groups based on
family income?
a. National Aid for Federal Teaching Assistance (NAFTA)
b. College Student Aid Federal Fund (CSAFF)
c. Free Application for Federal Student Aid (FAFSA)
d. Federal Aid to Student Organization (FATSO)
e. Federal Stafford Loan Program Report (FSLPR)
115. Selective private colleges advertise high tuition rates, but have the flexibility to discount the tuition
for each student on an individual basis. This type of near-perfect price discrimination practiced in
the real world is most similar to that which occurs in a
a. movie theater. d. nightclub.
b. restaurant chain. e. retail store.
c. jewelry store.
Consider the pricing strategy outlined in the following excerpt about a “smart” vending machine
and use it to answer the following questions:
Taking full advantage of the law of supply and demand, the Coca-Cola Company has quietly
begun testing a vending machine that can automatically raise prices for its drinks in hot weather.
“This technology is something the Coca-Cola Company has been looking at for more than a year,”
said Rob Baskin, a company spokesman, adding that it had not yet been placed in any consumer
market. . . . The process appears to be done simply through a temperature sensor and a computer
chip, not any breakthrough technology, though Coca-Cola refused to provide any details yesterday.
While the concept might seem unfair to a thirsty person, it essentially extends to another industry
what has become the practice for airlines and other companies that sell products and services to
consumers. The falling price of computer chips and the increasing ease of connecting to the
Internet has made it practical for companies to pair daily and hourly fluctuations in demand with
fluctuations in price—even if the product is a can of soda that sells for just 75 cents.
Source: Constance L. Hays, “Variable-Price Coke Machine Being Tested,” New York Times, October 28, 1999, C1.
116. If the “smart vending machine” described in the excerpt were available today on a 100-degree day
in Atlanta, Georgia, Coca-Cola would be purchased by the
a. person with the most price-inelastic demand for cola.
b. person with the most elastic demand for cola.
c. firm with the most inelastic supply of cola.
d. firm with the most elastic supply of cola.
e. person with a low reservation price.
ANS: A DIF: Moderate REF: Price Discrimination on Campus
117. If a “smart vending machine” were placed outside a classroom and it took other factors in addition
to temperature into account when setting its price, what would likely happen to prices for
caffeinated beverages during spring semester’s exam week?
a. Most students elect to attend class during exam week, so we would expect lower demand
for cola.
b. Students tend to run out of funds near the end of the academic year, so we would expect
them to be very insensitive to changes in price.
c. Demand for chemical alertness would likely be higher during this time and the weather
would be warmer, so we would expect the price of cola to be higher.
d. This is an area that students visit on a regular basis, so we would expect them to notice the
fluctuating prices and make alternative plans if they have price-inelastic demand.
e. The supply of cola is consistent from week to week, so we would expect the demand for
cola to remain unchanged.
118. In a price-discrimination setting, who pays the higher price for the same good?
a. Consumers with the most inelastic demand pay the highest price.
b. Consumers with the most elastic demand pay the highest price.
c. All consumers pay the same high price.
d. It is unknown which consumers would pay the higher price.
e. The consumers with the most inelastic supply pay the highest price.
ANS: A DIF: Moderate REF: Price Discrimination on Campus
119. In a price-discrimination setting, people with the most inelastic demand

a. pay the lowest price for the same good.
b. pay the same price as everybody else.
c. pay the highest price for the same good.
d. pay either a higher or a lower price.
e. do not buy the good.
120. Second degree discrimination, represented by the $5 foot-long sandwich available from Subway,
occurs when the price per unit
a. is consistent over time.
b. varies from month to month.
c. varies with the quantity sold.
d. varies from producer to producer.
e. is determined by the consumer’s willingness to pay.
121. At the Kickin’ Chicken Family Restaurant, which of the following menu items represents the
company’s attempt to price discriminate?
a. A large soft drink costs $2.99, whereas a small soft drink costs $1.99.
b. The “chicken little tenders with fries” menu name sells as an entrée at $8.99, while a
“kickin’ chicken tender basket with fries” menu name sells as an appetizer at $6.99; both
have the same amount of tenders and fries.
c. Takeout orders of dark meat buckets of chicken are $5.00 per bucket, while an order of
white meat chicken costs $6.00 per bucket.
d. The small-size potato salad is $1.49, while the large potato salad is $1.99.
e. The “bawk-buck” menu highlights restaurant items that are available for $1.00 or less
every day.
ANS: B DIF: Moderate REF: Price Discrimination on Campus
122. The local coffee shop, Latté Café, has a frequent-buyer program that offers a 5 percent discount to
customers who “like” its business page on Facebook. This allows the firm to price discriminate
because
a. everyone will now know where to go for the best coffee in town.
b. increasing its customer base lowers prices for all consumers.
c. customers who are sensitive to price will take the time to go to the website.
d. only java-obsessed customers are eligible for the discount.
e. price-conscious customers are usually unwilling to sign up for discounts.
123. Which of the following situations is considered price discrimination?

a. McDonald’s is offering food products for $1 if you order from the dollar menu.
b. Barnes & Noble offers books at a lower-than-market price to members, who must pay an
annual fee.
c. Karen uses TripAdvisor.com to research hotel recommendations online.
d. Best Buy is offering a discount on older model television sets.
e. QT, a chain of gas stations, typically supplies gasoline at lower prices to fleet vehicles.
124. Teryn booked a flight to Boston for her little sister’s wedding. When she boarded the plane, she
found out that Frugal Fred, in the seat beside her, paid $100 less for his ticket. Teryn paid a higher
price for her flight since she is more
a. price-elastic because she is the maid of honor at her sister’s wedding.
b. price-inelastic because she would not dream of missing her sister’s wedding.
c. price-sensitive because she does not like it when people get better deals than she does.
d. price-insensitive because she would have been just as happy to go to Boston any other
weekend.
e. price-static because she always has the same demand for trips to Boston, regardless of the
event.
125. Post-Thanksgiving consumers are already separated into distinct groups: those who shop on Black
Friday and those who do not shop on Black Friday:
A carnival of capitalism, Black Friday is the day after Thanksgiving, when retailers across the
country dangle deep discounts to lure customers out of bed. Black Friday is also the official
beginning of the holiday-buying frenzy. As retailers battled to draw customers into their stores on
Black Friday, online merchants were plotting a cunning ambush—offering an arsenal of
mobile-only deals intended to pick off shoppers as they wait in line. In 2011, with a
record-breaking Black Friday—shoppers spent $816 million online, 26 percent more than in 2010.
Cyber Monday, the Monday after Thanksgiving, might have started as a made-up occasion to give
underdog e-commerce sites a day of their own, but it has become an undeniably real
thing—surprising even to the people who invented it.
Source: “Times Topics: Black Friday,” New York Times, November 28, 2011,
http://topics.nytimes.com/top/reference/timestopics/subjects/r/retail_stores_and_trade/black_friday/index.html.
The excerpt indicates that Cyber Monday and online sales
a. discourage the violent Black Friday behavior that has become more prevalent in recent
years.
b. encourage shopper loyalty to brand leaders who can offer lower prices than their in-store
rivals.
c. split shoppers into two groups: those who like to shop on Fridays and those who like to
shop on Mondays.
d. further separate Black Friday shoppers into two distinct groups: those who like to find
deals in person and those willing to get better deals online.
e. sort shoppers into groups who like to shop during work hours and those who like to shop
during the holiday atmosphere provided by Black Friday.
ANS: D DIF: Moderate REF: Price Discrimination on Campus
126. A local discount store offers customers three options for printing their photos: a self-printing kiosk,
one-hour photos, and next-day prints. The most likely reason this type of firm bothers to offer so
many different options to its bargain-hunting consumers is because
a. offering alternatives to customers leads to greater consumer satisfaction.
b. some photos take longer to print than others, which allows firms to lower costs.
c. the variance in impatience on the part of the consumer allows the firm to maximize profit.
d. the different alternatives help consumers realize which service offers the best price.
e. the competing stores also offer these same options, so it allows the discount store to
remain competitive.
127. How does coupon clipping allow for price discrimination?

a. Coupon mailers are sent out only to economically disadvantaged households.
b. Businesses are able to reward those customers who truly want their product by offering
them a better deal than the casual consumer.
c. Because coupon users are less price-sensitive, they require large differences in price to be
apparent before they will be convinced to make a purchase.
d. One price is charged to people who put forth the effort to use the coupon, while another
price is charged to consumers for whom the marginal cost of finding and using the coupon
is greater than the marginal benefit of a lowered price.
e. It allows for price discrimination only if the consumer engages in extreme couponing,
where the risks outweigh the rewards.
ANS: D DIF: Moderate REF: Price Discrimination on Campus
128. What is the primary benefit of price discrimination?

a. There is no benefit; discrimination of any kind is wrong.
b. Charging multiple prices generates more profit for firms and matches more buyers and
sellers in the marketplace.
c. It converts firms that were price makers into price takers.
d. All surplus is transferred from the producer to the consumer.
e. It takes a market with varying demand elasticities and makes them more inelastic.
ANS: B DIF: Easy REF: What Is Price Discrimination?
129. When we say that firms must be price makers in order to practice price discrimination, it means
that this activity cannot occur with
a. competitive firms.
b. monopolists.
c. monopolistic competitors.
d. relatively elastic demand.
e. indistinguishable buyers.
130. A potential complication for successful price discrimination is

a. multiple demand elasticities among consumers.
b. the presence of a price maker in a market full of price takers.
c. a product or service for which consumers value differently.
d. other industry firms also practicing price discrimination.
e. the potential for consumers to resell a product or service.
ANS: E DIF: Easy REF: Conditions for Price Discrimination
131. Many food retailers offer loyalty cards that track purchases and offer free items to customers after
a certain threshold of purchases. Is this an example of price discrimination?
a. Yes. The store is separating its customers based on how much they spend, and the free
items represent a value to the customer that differs from that which is received by other
types of patrons.
b. Yes. Since the store is tracking purchases, it can offer individual customers discounted
prices on items that are purchased most frequently.
c. No. Since every customer has the option to receive a loyalty card, there is no
differentiation in benefits received by customers.
d. No. Since the rewards aren’t a discount in price, it wouldn’t qualify as price
discrimination.
e. No. Because the retailer might discontinue the card at any time, the customer may never
receive the earned free items.
ANS: A DIF: Moderate REF: Conditions for Price Discrimination
132. Dine-in restaurants typically have their lowest business volume on Monday and Tuesday nights.
Besides appealing to consumers on a budget, how might a restaurant benefit from charging
discounted prices on these nights?
a. Demand on these nights will increase to the point where the restaurant can remove the
price discounts.
b. Profits on these nights will surge, allowing the restaurant to close during other nights of
the week.
c. By creating an incentive for consumers, a restaurant is able to capture revenue that it
wouldn’t otherwise.
d. Price discrimination is always successful, so a restaurant can turn an unprofitable situation
into a profitable one.
e. Customers on a budget tend to tip their servers better, increasing the supply of staff willing
to work on these nights.
ANS: C DIF: Moderate REF: How Is Price Discrimination Practiced?
OBJ: 11.2 How is price discrimination practiced? MSC: Analyzing
133. Bakeries will often offer a discount on items that were made the day before but did not sell. How is
this an example of price discrimination?
a. Discounting the items, as opposed to giving them away, prevents customers from
attempting to resell them.
b. Making items of high enough quality to sell the following day means that a bakery has a
certain degree of market power.
c. It connects the bakery with buyers who value day-old products but aren’t willing to pay
the full price for a product that isn’t fresh.
d. Individuals with an inelastic demand for baked goods will travel to a different bakery if
their preferred bakery runs out of fresh product.
e. The bakery is unable to distinguish between types of buyers with fresh product, so it is
forced to keep old baked goods in order to maximize profit.
134. Service providers like cable companies have tiered pricing and also charge their customers
according to a schedule of fees. Sometimes customers are able to get fees or service charges
waived for a certain amount of time if they contact customer service and threaten to cancel their
service. This type of negotiation is an attempt to practice
a. good customer service. d. competitive pricing.
b. misleading pricing. e. perfect price discrimination.
c. elastic price discrimination.
ANS: E DIF: Easy REF: One Price versus Price Discrimination
135. As the quantity of different prices charged by a firm ________, the amount of ________ generated
increases.
a. decreases; social welfare d. increases; deadweight loss
b. decreases; producer surplus e. increases; consumer surplus
c. increases; profit
136. Airlines have first-class or business-class seating, for which customers pay a higher price to
receive more room, extra amenities, and more attentive service. Would this illustrate price
discrimination?
a. No, because first-class and economy-class tickets represent two entirely different products.
b. No, because there is no additional value in purchasing a first-class ticket.
c. Yes, because airlines are able to charge different prices to customers seeking an improved
flying experience.
d. Yes. Since wealthy travelers are the only individuals who can afford first-class travel, the
airline is able to set pricing based on their increased ability to pay.
e. Maybe. It is price discrimination only if no other airline offers first-class tickets for that
travel route.
ANS: A DIF: Easy REF: What Is Price Discrimination?
137. Despite the fact that a single price can provide ________ for both producer and consumer, it
causes ________, resulting from market inefficiency.
a. surplus; deadweight loss d. price discrimination; consumer surplus
b. deadweight loss; surplus e. competition; misallocation
c. price discrimination; producer surplus
138. ________ transfers the consumer surplus under perfect competition to the producer.
a. Monopolistic competition d. Profit maximizing
b. Deadweight loss e. Perfect price discrimination
c. Social welfare
139. A common feature among perfect competition and perfect price discrimination is the elimination
of
a. deadweight loss. d. market efficiency.
b. consumer surplus. e. social welfare.
c. producer surplus.
ANS: A DIF: Easy REF: The Welfare Effects of Price Discrimination
140. ________ maximizes the quantity of goods sold because it matches each consumer with his or her
willingness to pay.
a. Perfect price discrimination d. Marginal cost
b. Monopolistic competition e. Deadweight gain
c. Total surplus
141. When economists use the word “perfect,” what does it indicate about the outcome of a market?
a. Deadweight gains are maximized and marginal output is equal to zero.
b. Consumer surplus is maximized and economic growth results from accelerated consumer
spending.
c. Producer surplus is minimized because society is harmed by excessive firm profits.
d. Social welfare is maximized, resulting from an absence of deadweight loss.
e. Producer surplus and consumer surplus are exactly equal.
ANS: D DIF: Easy REF: The Welfare Effects of Price Discrimination
142. The study of price discrimination is both interesting and complex because
a. there is no single model that represents how it is practiced in each firm or industry.
b. the single model that represents all price discrimination allows economists to delve more
deeply into practical analysis.
c. monopolies are often shrouded in mystery and this practice opens a window into their
day-to-day operations.
d. students of economics can relate to the examples, but aren’t able to easily calculate how
price discrimination is beneficial.
e. the consumer or the producer has the potential to maximize surplus, leading to rigorously
debated social concerns.
OBJ: 11.2 How is price discrimination practiced? MSC: Remembering
143. If total welfare is equal to the entire area under the demand curve, what other information do we
know with certainty?
a. Consumer surplus is maximized.
b. Producer surplus is maximized.
c. Deadweight loss is zero.
d. Consumer surplus is equal to producer surplus.
e. A firm has achieved perfect price discrimination.
144. In the context of this chapter, how can price discrimination increase profits for firms and increase
the welfare of society?
a. It can’t; those are two mutually exclusive goals.
b. When firms earn higher profits, governments collect additional tax revenue.
c. When firms earn higher profits, they are able to employ more workers, leading to a more
prosperous economy.
d. Firms are able to capture more revenue by selling their product to more consumers, which
means that more buyers are able to acquire a desired product.
e. It can’t; welfare-minded societies tend to overregulate business profits.
ANS: D DIF: Easy REF: The Welfare Effects of Price Discrimination
145. The federal government often gives out tax credits for individuals who purchase fuel-efficient or
electric vehicles. A car dealership, which attempts perfect price discrimination, would respond to
this knowledge by
a. targeting the same price since the individual must like the car, with or without the tax
credit.
b. targeting a lower price. The buyer needed an incentive in order to purchase the vehicle, so
it can be assumed that the individual is more demand-elastic.
c. targeting a higher price. The tax credit increases the buyer’s maximum willingness to pay.
d. targeting the same price because there’s no way for the dealership to know who has the tax
credit and who doesn’t.
e. increasing the sticker price on all of its vehicles by the amount of the tax credit.
146. According to economists, extreme couponing is not worth the effort if the ________ exceeds the
________ from the coupons, when time is taken into account.
a. waste; benefit d. savings; time
b. opportunity cost; savings e. efficiency; cost
c. savings; benefit
ANS: B DIF: Moderate REF: How Is Price Discrimination Practiced?
147. How does price discrimination help us understand how many markets actually function?
a. All firms will practice price discrimination unless a government prohibits the practice.
b. Monopolistic competition is rare, so economists are able to focus in on the few firms that
engage in the practice.
c. Instances of perfectly competitive markets and monopoly are rare.
d. Antidiscrimination laws are widespread, so models explaining price discrimination help us
better understand markets that we are unable to witness.
e. Monopolistic competition is the most common market form, but it is the only one that
does not engage in price discrimination.
ANS: C DIF: Easy REF: How Is Price Discrimination Practiced?
OBJ: 11.2 How is price discrimination practiced? MSC: Remembering
148. From an initial examination, price discrimination may not seem like a social good because
________ is transferred from consumer to producer, but the overall benefit for society ________.
a. deadweight loss; decreases d. surplus; decreases
b. deadweight loss; increases e. surplus; increases
c. market power; multiplies
149. Which of the following is a true statement about perfect price discrimination?
a. If the ability to discriminate maximizes, the overall social welfare minimizes.
b. The transfer of surplus from consumer to producer results in an unequitable outcome.
c. Firms are able to determine the exact maximum willingness to pay for most consumers.
d. Social welfare is determined by subtracting producer surplus from consumer surplus.
e. Deadweight loss does not exist.
ANS: E DIF: Easy REF: One Price versus Price Discrimination
150. Charging a different price to each consumer results in an interesting situation. A firm is able to
achieve the efficiency of a(n) ________ while also producing the output that a(n) ________ would
choose.
a. monopolist; government d. elastic consumer; inelastic consumer
b. monopolist; society e. competitive market; monopolist
c. firm; consumer
SHORT ANSWER
1. Why would a restaurant choose to make most of its profit on alcoholic drinks, yet only break even
on food?
ANS:
Restaurant management may choose to do this because many customers are fairly price-sensitive
when ordering food, but they are not as sensitive to price when it comes to social drinking. In
addition, after multiple drinks, demand for some people will be relatively inelastic. A company can
then make most of its profit from the group of people with inelastic demand for alcoholic drinks
and be content to break even on the group of people who are nondrinkers.
DIF: Moderate REF: Conditions for Price Discrimination

2. How do we know if the market for a product or service is vulnerable to price discrimination?
ANS:
The firm must hold some amount of market power (price-making ability) and the buyers must be
easily distinguishable with different price elasticities of demand (ability to distinguish among
groups of buyers). These are the two conditions necessary for price discrimination; however, just
because they are present does not necessarily mean that the firm will choose to price discriminate.
3. Each year, more shopping is completed online by consumers who are hoping to get a better deal.
However, many companies’ websites actively collect data about consumers’ shopping habits and
send this information, known as “cookies,” back to the website owner. How might this information
be used to the company’s advantage?
ANS:
Companies could use the information about their customers’ buying habits to estimate each
customer’s elasticity of demand and to offer different prices to different consumers. In fact, if the
firm were able to gather enough information, it could practice perfect price discrimination. The
benefit to the company would be realized by transferring consumer surplus to producer surplus and
thus increasing total revenue.
DIF: Difficult REF: Conditions for Price Discrimination

4. Many retailers and stores tend to offer different goods bundled together as a promotion, selling
them at a lower price than they would cost if you bought each item separately. Is this a practice of
price discrimination? Explain.
ANS:
Yes, it is price discrimination. Price discrimination requires the same good to be offered at
different prices to different groups of consumers. In this case, the retailer is offering a group of
goods at one price versus a single good at a different price. Consumers will self-separate according
to their quantity preference.
DIF: Moderate REF: What Is Price Discrimination?

5. Why would a store in a college town be likely to offer a discount to college students who show
their student identification (ID)?
ANS:
Students at college are very sensitive to changes in price (elastic demand), but nonstudents who
also live in the town may be less sensitive to changes in price. In addition, the availability of the
student ID offers an opportunity for a firm to distinguish between these two markets. By offering a
two-tiered price system, the firm is able to price discriminate and gain extra revenue that it may
have lost by setting a single price too high or too low.
DIF: Moderate REF: Price Discrimination on Campus

6. In the research paper by Aydin and Ziya, “Personalized Dynamic Pricing of Limited Inventories,”
Operations Research 57, no. 6 (2007):1523–1531, the authors state that research “suggests that
personalized pricing is more acceptable to consumers when it is framed as offering tailored
discounts from a fixed price.” Survey summaries found that “90% of customers found . . .
personalized pricing unacceptable,” but “only 64% of the same customers stated that they would
be bothered if other customers got better discount offers than they did.” What economic insight are
these customers missing about the benefits of price discrimination in any form?
ANS:
When firms are able to charge different prices to different groups of consumers, the result is more
economic activity and greater efficiency. With price discrimination in place, many customers will
pay lower prices than they would if a firm charged a single price. This increases social welfare,
reduces deadweight loss, and creates a more efficient outcome. However, one reason that
customers may not find price discrimination acceptable, even though it increases overall market
efficiency, may be because the gains from exchange primarily accrue to the producers.
DIF: Difficult REF: The Welfare Effects of Price Discrimination

OBJ: 11.1 What is price discrimination? MSC: Evaluating
7. Reflect on the following excerpt, which is a news story from the Washington Post about dynamic
pricing by online retail giant Amazon.com:
Few things stir up a consumer revolt quicker than the notion that someone else is getting a better
deal. That’s a lesson Amazon.com has just learned. Amazon, the largest and most potent force in
e-commerce, was recently revealed to be selling the same DVD movies for different prices to
different customers. It was the first major Web test of a strategy called “dynamic pricing,” which
gauges a shopper’s desire, measures his means and then charges accordingly. The Internet was
supposed to empower consumers, letting them compare deals with the click of a mouse. But it is
also supplying retailers with information about their customers that they never had before, along
with the technology to use all this accumulated data. While prices have always varied by
geography, local competition and whim, retailers were never able to effectively target individuals
until the Web. “Dynamic pricing is the new reality, and it’s going to be used by more and more
retailers,” said Vernon Keenan, a San Francisco Internet consultant. “In the future, what you pay
will be determined by where you live and who you are. It’s unfair, but that doesn’t mean it’s not
going to happen.”
Source: David Streitfeld, “On the Web, Price Tags Blur: What You Pay Could Depend on Who You Are,” Washington
Post, September 27, 2000, A1.
Based on your reading of the chapter about price discrimination, how would you respond to this
article?
ANS:
From an economics point of view, the fundamental problem is that, although perfect price
discrimination maximizes market efficiency, it is often not perceived as equitable or fair because it
transfers surplus previously enjoyed by consumers to producers. In particular, many people who
choose to shop online do so not only for convenience but also because they are sensitive to price
changes. In addition, unlike movie prices, the different prices that Amazon.com was reportedly
charging were not available for the general public to see before making a purchase.
DIF: Difficult REF: The Welfare Effects of Price Discrimination

8. Why might some consumers believe that, when a firm is able to practice perfect price
discrimination, the outcome is less than “perfect” for the consumer?
ANS:
The term uses the idea of perfection because it results in a pricing structure that maximizes market
efficiency, but for consumers, the outcome may be less than perfect because any consumer surplus
that they previously enjoyed is now transferred to producer surplus. Consumers are now paying
their maximum willingness to pay, but some may have previously paid less than their willingness
to pay, which resulted in a difference between the price they were willing to pay and the price that
they actually had to pay (consumer surplus). When a firm can price discriminate perfectly,
consumer surplus equals zero.
DIF: Moderate REF: The Welfare Effects of Price Discrimination
9. Before he became Dr. McDreamy in Grey’s Anatomy, Patrick Dempsey played Ronald, an
awkward high school student in the romantic comedy Can’t Buy Me Love (1987). In the film,
Ronald pays Cindy, the most popular girl in school, $1,000 to date him for a month. Cindy’s old
boyfriend was the former star quarterback who was equally as popular as Cindy and did not have
to pay to date her. Explain how Cindy is practicing price discrimination with her dating practices.
ANS:
Cindy has separated the males at school into two distinct groups: those who are popular and those
who are not. The popular males can be her boyfriend for the price of $0, while the unpopular
males, like Ronald, can date her only if they pay her their maximum willingness to pay.
DIF: Moderate REF: What Is Price Discrimination?

10. Colleges are able to practice price discrimination by separating their students into distinct income
groups using the Free Application for Federal Student Aid (FAFSA) and by offering a two-tiered
pricing structure based on residency. Based on what we know about price elasticity of demand,
what is generally true about these distinct groups?
ANS:
Generally, students from low-income families have a more elastic demand for college, whereas
students from high-income families have a more inelastic demand for college. In addition, students
who attend an out-of-state school have a much more inelastic demand for that school, and students
who attend an in-state school have a more elastic demand.

11. Price discrimination is practiced in different ways in the real world. Explain why the $5 foot-long
submarine sandwich from Subway does not strictly meet the definition of price discrimination.
ANS:
Because the $5 price is available to anyone who enters the store at any time of day, it is not
considered price discrimination in the form that we have learned in this chapter. However, it is an
example of secondary price discrimination (when the price per unit varies with the quantity sold).

12. Publishing novels is another example of price discrimination. A hardback version of a novel
precedes a less-expensive paperback version. Explain how price discrimination can occur in these
markets.
ANS:
Hardback consumers will usually have a higher price elasticity of demand than consumers in the
paperback market. This condition allows different prices to be charged, and thus consumers are
separated according to their willingness to pay. Resale within each market is possible, but the
paperback is released after the market for the hardback is exhausted, and paperbacks are cheaper to
publish.

13. List and explain the conditions for price discrimination.
ANS:
Price discrimination results when a firm can sell the same product at different prices to different
groups of customers. The difference in the price is not related to the cost to produce the good or
service. Also, the firm must be able to separate the customers into different groups, and preventing
or delaying resale also helps the discrimination process.

14. Using different words as search criteria can produce different prices on the same Web-based
market. Explain how this could happen.
ANS:
More-descriptive wording that is associated with a particular special interest group may result in a
more price inelastic demand relationship, allowing for a higher price to be charged for the same
product. For example, a “cultivator” machine for turning dirt was listed at a higher price on a
popular market website than the same machine that was listed as a “tiller.”
DIF: Difficult REF: Distinguishing Groups of Buyers

15. How could college campus “smart” vending machine owners practice price discrimination?
ANS:
Examples could vary, but charging higher prices on hotter days or during exam periods are
possibilities. Another possibility is giving volume discounts, such as a lower price for a second,
immediate purchase.

16. Explain the welfare effects of perfect price discrimination.
ANS:
If every buyer pays his or her maximum willingness to pay, then no economic consumer surplus
would result. All of the market surplus is absorbed as producer surplus, surplus is maximized, and
no deadweight loss is produced.

17. Explain the welfare effects of price discrimination.
ANS:
Any price discrimination that results in higher prices would result in a transfer of surplus from
consumers to producers. The higher price results in a deadweight loss from lower market
activity—some buyers are now priced out of the market. Any price discrimination that results in
lower prices would transfer consumer surplus to the producer. For example, perfect price
discrimination transfers all of the surplus in the market to the seller. The overall effect of price
discrimination is welfare improving because the deadweight loss decreases.
18. Explain the relationship between price elasticity and price discrimination.
ANS:
Price discrimination is only possible when groups can be separated on the basis of their price
elasticity of demand for the same product. If the buyers in a market can be separated into higher
and lower elasticity groups, then the group that is more inelastic will be willing to pay a higher
price.
DIF: Easy REF: Distinguishing Groups of Buyers

19. Why would some consumer groups complain to public policy makers about alleged price
discrimination?
ANS:
The groups who would complain would be those who pay a higher price for the same good as
another group. The complaining group must be willing to pay the higher price and have a more
inelastic demand relationship. A prime example is reduced prices for “ladies nights” at social
clubs—some men complain that they are forced to pay higher prices for the same beverages.
DIF: Easy REF: Distinguishing Groups of Buyers

20. List three examples of retail price discrimination.
ANS:
Many examples can be put forth. Coupons are one example. Wealthier consumers are not usually
as interested in the minor discounts offered with the effort of seeking, cutting, and presenting
coupons. Discounts at movie theaters for seniors is another example. Seniors usually have more
flexible time schedules, although in the last 10 years, the minimum age for senior discounts has
increased from 55 to 60! Airlines are a third example. Prices for seats sold long in advance are
usually cheaper than seats sold shortly before the same flight. Auctions are another example. Each
buyer bids up to his or her maximum willingness to pay, leaving no consumer surplus or
deadweight loss.
DIF: Easy REF: How Is Price Discrimination Practiced?

21. How do grocery stores practice price discrimination?
ANS:
Large chain grocery stores will contract with name-brand producers to relabel an almost identical
product with the store’s name and sell it at a reduced price. This reduced-priced product will
appeal to buyers will more elastic demand. Producers and stores will sell more product.
DIF: Easy REF: How Is Price Discrimination Practiced?

22. What is the relationship between an auction and perfect price discrimination?
ANS:
In almost all auctions, the “winner” pays his or her maximum willingness to pay. This amount
transfers all consumer surplus to the seller. Thus, each buyer “self-discriminates” (maybe even
perfectly) and separates from the other buyers based on these differences in willingness to pay.

23. Suppose a small town has one movie theater and one Mexican food restaurant. Which
establishment will find it easier to price discriminate?
ANS:
As with the topic of elasticity, price discrimination must consider the number of substitutes in a
market. Given that the small town has more than one restaurant and only one theater, the Mexican
restaurant would have more substitutes than the theater. With no substitutes, the theater would be
able to practice price discrimination.
DIF: Moderate REF: Distinguishing Groups of Buyers

24. Why would a theme park practice discrimination by age for admission but not for souvenirs?
ANS:
Separating the buyers is less costly at the entrance gate than in a souvenir shop. At admission, each
entrant must enter with his or her own ticket, which can be priced with discrimination. In the
souvenir shop, it would be more difficult to enforce discrimination. Children who were admitted
for a lower price could easily purchase souvenirs for their parents.
DIF: Moderate REF: Distinguishing Groups of Buyers

25. Suppose there are three types of concertgoers at symphony hall. Staff number 30 and are willing to
pay $50. Students number 20 and are willing to pay $30. Music lovers number 50 and are willing
to pay $70. The cost of the concert is $500. The hall must charge in increments of $5 (that is, $20
or $25, but not $23), and wants to maximize revenue.
a. If symphony hall can charge only one price, how much revenue is earned?
b. If symphony hall can perfectly price discriminate, how much revenue is earned?
ANS:
a. Calculate revenue for those who would attend at prices in $5 increments at lower and higher
than $50 to verify. (Bear in mind that no one would attend at a price greater than $70.) If only
one price can be charged, then symphony hall should charge $50. At this price, 80 people would
attend—50 music lovers and 30 staff. Revenue would be $4,000.
b. Calculating revenue for perfect price discrimination, each group (and hence more people) would
attend paying their willingness to pay. Separating the buyers into their respective groups would
result in revenue of $5,600 (30  $50 + 20  $30 + 50  $70).
DIF: Difficult REF: How Is Price Discrimination Practiced?

OBJ: 11.2 How is price discrimination practiced? MSC: Analyzing
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VII
Un mari complaisant n’aurait certes pas aussi bien favorisé les

rencontres de Fabienne et de Robert. Car un mari complaisant
n’aurait jamais eu pour cela assez de cynisme.
Mais Ernest Gaudron y mettait une innocence sans borne.
Il savait bien, d’après une légende fortement établie et maintes
fois justifiée, qu’il est dangereux d’admettre un jeune homme dans
l’intimité d’une jeune femme.
Mais il avait une confiance absolue dans la vertu de Fabienne, et,
en plus, une certitude vigoureuse que lui, Ernest Gaudron, ne serait
jamais trompé.
Pourtant il avait eu deux ou trois fois l’occasion, au cours de sa
vie de célibataire, de tromper des amis avec leurs femmes. Mais les
autres, c’étaient les autres, et lui c’était lui. Cette foi en son étoile ne
l’avait jamais abandonné dans la vie, et continuait à lui faire perdre
beaucoup d’argent au baccara.
C’était aussi son caractère de défier l’opinion du monde par une
espèce de bravade. Il ressemblait à beaucoup d’autres imprudents,
qui, pour ne pas avoir peur de leur imprudence, préfèrent en tirer un
certain orgueil.
Robert ne resta pas trois jours dans sa pension de famille…
Ernest Gaudron, qui était de plus en plus enchanté de la probité
certaine et de l’intelligence indéniable de son nouvel employé,
prétendit qu’il n’était pas assez en contact avec lui. Il y avait dans la
maison une chambre d’ami. Il fallut à toute force y installer Robert.
Le jeune Nordement ne pouvait pas décliner cette aimable
invitation. Faut-il le dire ? Il n’en fut pas enchanté.
Il était heureux de voir de temps en temps Fabienne, mais il se
demandait si ce ne serait pas un bonheur fatigant d’être
constamment auprès d’elle. Il pensait à l’ennui de la « perpétuelle
mise en scène » dont parle Verlaine. Il sentait bien qu’il plaisait à la
jeune femme, mais cette impression favorable qu’il produisait sur
elle, ne risquait-elle pas de se gâter, quand elle le verrait plusieurs
heures par jour ? Il avait certes confiance en lui, mais se défiait de
lui-même presque autant.
Depuis son entrée dans la maison, il avait passé toutes ses
soirées avec Fabienne, et M. Gaudron ne fut jamais plus assidu au
Casino de Cabourg. Bien entendu, le lendemain du jour où il avait
fait sa connaissance, il avait raconté toute sa vie à Mme Gaudron.
Elle savait maintenant qu’il était un enfant prodigue.
Il lui avait dit pourquoi il avait quitté sa famille, et comment ses
parents avaient voulu lui faire épouser Mlle Ourson. Pourtant, sans
s’en apercevoir, il mentit un peu, et fit de cette jeune fille un portrait
légèrement flatté.
Mme Gaudron, en écoutant ce récit, aima à se donner un air
maternel précoce. Comme mère, elle ne risquait pas d’être prise au
sérieux, car elle n’aurait pu enfanter Robert qu’à l’âge de trois ans.
Elle demanda gravement au jeune homme s’il avait bien réfléchi,
s’il n’avait pas cédé à un coup de tête…
Il lui répondit d’un air viril que son acte avait été profondément
mûri. Ce qui fit un double plaisir à Fabienne : elle vit qu’il n’était pas
question pour lui de retourner au Vésinet ; et, en même temps, elle
constatait que ce n’était pas un étourneau frivole et que l’on pouvait
attendre de lui de durables sentiments.
Il la consulta sur un point important : fallait-il écrire tout de suite
une lettre décisive à sa famille ?
Son désir à lui eût été d’ajourner encore cette explication fatale.
Les femmes, au rebours des hommes, sont rarement disposées
à ajourner les démarches. Les hommes détestent ataviquement les
résolutions à prendre. Au cours de longs siècles de liberté et de
responsabilité totale, ils ont trop souvent connu l’ennui d’être obligés
d’agir.
Fabienne dit donc à Robert :
— Il faut écrire à vos parents…
Elle ne lui disait plus : monsieur Nordement. Elle ne l’appelait pas
encore Robert tout court. Alors elle ne lui donnait aucun nom. Lui
non plus d’ailleurs. Quand ils s’interpellaient, ils remplaçaient les
noms absents par un petit ronronnement imperceptible.
— … Hon hon… il faut écrire à vos parents. Il faut leur dire
nettement votre façon de penser sur ce mariage.
— Oui, fit Robert, je comprends. Je me suis dit déjà que, du
moment qu’ils avaient engagé des pourparlers avec les Ourson, il
valait mieux ne pas laisser lesdits Ourson s’emballer sur des
espérances, que je suis décidé à ne pas réaliser.
« … Quand je dis qu’ils s’emballent, se hâta-t-il d’ajouter, ce n’est
pas à moi que je songe. Mais je sais que le père Ourson, dont la
grosse fortune est récente, désirerait beaucoup s’allier à ma famille,
qui est honorablement connue…
(Ceci dit sans en avoir l’air. Mais il n’était pas fâché de donner en
passant cette petite indication…)
« … Je peux très bien, continua-t-il, écrire tout de suite à mes
parents que j’ai renoncé à unir mes jours à ceux de Mlle Ourson…
Mais ce qui m’ennuie, c’est qu’ils vont discuter, insister, essayer
encore de me convaincre. Ils sont même capables, du moment que
je ne reviens pas, de venir me relancer ici. Or je tiens à ce qu’ils me
laissent tranquille… »
Ils arrêtèrent ensemble un projet de lettre. Robert écrirait à ses
parents que s’il ne leur donnait pas son adresse, c’est qu’il ne voulait
pas discuter avec eux. Il continuerait, leur dirait-il, à faire du tourisme
en chemin de fer pendant quelque temps encore. Il enverrait des
cartes postales pour que l’on fût au courant de sa santé. Et il
trouverait bien le moyen d’avoir de leurs nouvelles sans qu’ils
eussent à lui écrire.
Sur ce dernier point, en effet, il avait déjà son idée. Il donnerait
sa véritable adresse à un cousin dévoué qui ne le trahirait
certainement pas. Ce cousin allait tous les dimanches faire le bridge
au Vésinet avec M. Nordement. Il tiendrait Robert au courant de
l’état de santé de sa famille.
Il écrivit donc la lettre à ses parents sous les yeux de Fabienne,
qui lui donnait de petits conseils très justes et très fins pour modifier
certaines expressions.
Ils prirent tous deux un grand plaisir à ce travail en commun.
Robert connaissait pour la première fois de sa vie le charme de ce
qu’il appelait encore une amitié féminine, à peine troublée par des
petites émotions, telles que le frôlement de quelques cheveux fins
sur sa tempe.
Elle lui conseilla un post-scriptum particulièrement tendre pour
amortir l’effet un peu brutal de cette lettre. Il fallait dire à ses parents
qu’il les aimait beaucoup.
Il écrivit docilement :
« Vous savez, chers parents, que je vous aime beaucoup… »
— Oh ! dit Fabienne, ça ne suffit pas !
Après une seconde d’hésitation, elle lui dicta :
« Chers parents, vous êtes ce que j’ai de plus cher au monde… »
— Non, dit Robert, je n’écrirai pas cela.
— Pourquoi ?…
— Parce que…
Petit silence. Il ne la regardait pas, et ne la vit pas rougir. Elle lui
dit, très vite, quand sa gorge se fut desserrée un peu :
— Alors écrivez ce que vous voudrez…
… Ils pensaient l’un et l’autre qu’ils étaient des êtres très droits.
Fabienne avait beaucoup d’affection pour son mari, Robert de la
reconnaissance et une bonne grosse sympathie pour ce bon gros
homme. Ils étaient décidés dans le fond de leur cœur à ne jamais le
tromper.
Une volonté ne triomphe pas toujours d’une volonté contraire qui
lui résiste. Mais quand deux volontés se liguent ainsi, il arrive
qu’elles ne constituent pas à elles deux une barrière absolument
solide.
Précisément parce qu’elles s’appuient l’une sur l’autre, parfois un
léger fléchissement de l’une d’elles entraîne l’écroulement de toute
la barricade.
VIII
Pour que, vis-à-vis de ses parents, le secret de la résidence de

Robert fût bien gardé, il valait mieux que les lettres qu’ils recevraient
ne portassent pas le cachet de la poste de Caen. La lettre que
Fabienne et Robert avaient écrite en collaboration avait été mise au
bureau de poste d’une localité normande sise à une trentaine de
kilomètres du chef-lieu… Il fut décidé que chaque fois qu’il écrirait à
ses parents, on procéderait de la même façon et que les deux
jeunes gens s’en iraient en limousine pour aller chercher chaque
fois, dans un rayon d’une dizaine de lieues, un bureau de poste
différent… C’était un but de promenade qui varierait ainsi de la façon
la plus agréable.
Robert, chez M. Gaudron, était installé au deuxième étage. M.
Gaudron et sa femme avaient chacun une chambre au premier.
La chambre de Robert donnait sur une cour plantée d’arbres, où
se trouvait l’écurie particulière de M. Gaudron. Ernest avait deux
autos, mais il devait à sa profession de marchand de chevaux de ne
pas abandonner la traction animale. Il gardait donc, pour la tradition,
deux chevaux rouans, du Merlerault, qu’il promenait bien
ostensiblement, attelés à un phaéton, à travers la ville. Mais, dans
son for intérieur, il donnait la préférence à l’automobile. Il avait donc
deux voitures, une torpedo considérable, qui faisait surtout le service
du baccara, et une belle limousine pour Fabienne, à qui le vent
brutal était désagréable.
C’était cette voiture qui, tous les deux jours, emmenait Fabienne
et Robert dans la campagne.
Ernest disait à déjeuner :
— Est-ce que vous sortez cet après-midi, pour que je prévienne
le chauffeur ?
— Oui, disait Fabienne, nous avons une lettre à envoyer au
Vésinet.
On avait mis Ernest au courant de la véritable situation sociale de
son employé. Et cette histoire l’avait amusé énormément. Séance
tenante, aussitôt qu’il avait appris que son jeune secrétaire était
d’une famille très aisée, il l’avait augmenté de quatre cents francs.
Robert, logé et hébergé chez son patron, avait donc près de neuf
cents francs par mois pour son entretien, son argent de poche, et les
goûters qu’il offrait à la campagne à Mme Gaudron.
Il était tout de même gêné des libéralités d’Ernest, bien qu’il n’eût
encore à se reprocher aucun acte d’ingratitude caractérisé… Il
apaisait sa conscience, en « en mettant » tant qu’il pouvait quand il
était à son travail. Il arrivait tous les matins au bureau à huit heures
précises. Ce qu’il avait à faire n’exigeait aucun génie ; il ne fallait
pour cette besogne qu’une application facile et minutieuse, sans
effort véritable, et dont s’accommodait à merveille son tempérament
un peu paresseux.
Ernest Gaudron ne mettait jamais le nez dans les livres de
Robert. Il aurait pu faire une constatation qui l’aurait fortement
étonné : c’était qu’il était beaucoup moins volé par son personnel
qu’il n’avait de tendances à le croire.
Comme dans beaucoup de maisons de commerce, les dépenses
étaient plus élevées qu’on ne l’avait prévu. Car il est rare que le
calcul des frais, fait à l’avance, ne soit pas très optimiste. L’affaire
est moins avantageuse qu’on l’avait espéré. Alors le négociant
préfère supposer qu’il y a du coulage, et, pour garder une bonne
opinion de son sens commercial, adopter une fâcheuse opinion de
l’humanité.
Robert se disait parfois : les gens de la maison vont me détester,
car je serai leur surveillant. Ils s’en vengeront en faisant des ragots
sur moi, et sur Fabienne.
Mais il s’aperçut qu’il ne les gênait guère, car leurs petits
« rabiotages » étaient insignifiants.
Il s’aperçut aussi que les palefreniers s’occupent peu des affaires
sentimentales de leur prochain. Un petit verre, le plus souvent
possible, et, de temps en temps une aventure sensuelle, brutale et
sournoise, avec une personne du sexe… ils n’en demandent pas
davantage à la destinée.
Quant au professeur d’équitation, il vivait dans un domaine étroit,
où le confinait l’amour de lui-même, et le souci de la propreté de ses
ongles.
Robert pouvait donc impunément, sans faire jaser le personnel,
s’en aller tous les jours en promenade avec Fabienne. Des gens de
la ville auraient pu y trouver à redire. Mais la limousine était très
discrète, et les deux amis gagnaient très vite la campagne.
Cependant cette intimité de tous les jours, ces repas et ces
promenades qui les rapprochaient à tout instant, n’étaient pas de
nature à avancer les affaires du Malin : lorsque deux êtres se voient
beaucoup et sans contrainte, quand ils ont plus de bonne éducation
que d’audace, le degré d’intimité qui s’établit entre eux devient
difficile à dépasser. Au cours d’une promenade en limousine, si
Robert eût désiré prendre la main de Fabienne, il aurait eu, pour
oser ce geste, moins de hardiesse que s’il s’était trouvé pour la
première fois avec elle… La jeune femme paraissait tellement
tranquille, tellement confiante ! S’il avait senti en elle un peu
d’inquiétude, il aurait eu plus de courage.
Le jeune Nordement était donc assez énervé. Bien entendu, il
était toujours très ferme dans ses idées de résistance, et persuadé
qu’il ne trahirait jamais l’excellent Ernest Gaudron… Il s’impatientait
tout de même, et trouvait que le Destin ne le poussait pas assez sur
le chemin de la tentation.
Une fois seul, il rêvait à des occasions de se livrer à des gestes
plus significatifs… Ne pouvait-il pas arriver qu’au cours d’une
promenade en auto, par un de ces crépuscules de septembre,
Fabienne se sentît un peu de froid aux épaules, et qu’il la prît
doucement dans ses bras pour la réchauffer ? Mais Fabienne, qui ne
craignait le vent que pour son teint, n’était pas frileuse ; d’ailleurs la
limousine était déplorablement bien fermée.
D’autres fois, il imaginait une petite excursion à pied dans la
Suisse normande. On laissait la voiture à Thury-Harcourt, et en
descendant un sentier étroit, on s’aventurait sur les bords escarpés
de l’Orne.
Mais est-ce vraiment un plaisir sans mélange que de soutenir
une dame dans un endroit où sa propre sécurité est en jeu, et se
sent-on à ce moment l’esprit assez libre pour profiter du poids
aimable du corps souple qui s’appuie dangereusement sur le vôtre ?
Tous les soirs, il restait en tête à tête avec Fabienne. La soirée
finie, il fallait regagner sa chambre d’ami, à l’étage au-dessus.
Cette histoire piétinait. Il sentait que peu à peu son prestige
d’inconnu allait s’affaiblir, qu’il entrerait trop dans les habitudes de
Fabienne, qu’il serait à bref délai un « ami » classé. Cette idée lui
donnait, en présence de son amie, des minutes de maussaderie…
La jeune femme lui disait : « Vous n’êtes pas de bonne humeur
ce soir ».
Il ne niait qu’évasivement, pour la troubler un peu, et l’inquiéter.
Pourtant la conversation entre eux ne languissait pas trop. Elle
était encore alimentée par des souvenirs littéraires. Ils avaient
épuisé le sujet Francis Picard qui ne les attendrissait plus que par
complaisance. De même, Ernest Gaudron ne donnait rien. Ils
l’avaient estimé, jaugé, jugé, condamné, absous, sous tous ses
aspects, en première instance et en appel.
Tout de même, il leur aurait fallu un peu plus de souvenirs
communs. Le moment était venu d’en fabriquer pour l’avenir.
Un soir que Robert était particulièrement maussade, et presque
bougon, elle l’interrogea sérieusement et lui demanda ce qu’il avait :
n’était-ce pas un besoin de revoir les siens, une sorte de nostalgie ?
Il répondit : Oh non ! avec un élan bien sincère. Car, vraiment, à
ce moment, l’affaire importante qui absorbait ses préoccupations ne
lui laissait aucune place pour penser à ses parents. Le foyer paternel
manque rarement à ceux qui s’en vont sur la route enivrante de la
conquête. D’ailleurs, il se sentait très libéré de tout remords filial
depuis qu’il avait envoyé cette lettre, où il signifiait nettement à sa
famille qu’il n’épouserait pas Mlle Ourson.
— Alors, continua Fabienne, pourquoi êtes-vous d’aussi
mauvaise humeur ?
— Mais je n’ai rien, je vous assure. C’est purement une idée que
vous vous faites…
— Alors, soyez assez gentil pour être plus gai !
— Mais oui, mais oui, répondit-il, en montrant bien visiblement
qu’il s’efforçait de sourire.
Puis, au bout d’un instant…
— Je suis très heureux ici… Mais je crois que je ne pourrai pas y
rester…
— Pourquoi, mais pourquoi ? dit-elle, d’une voix qu’il eut le plaisir
de sentir anxieuse.
— … Écoutez. J’ai peut-être tort de vous parler comme je vais le
faire. Mais vous voulez bien que je vous considère comme une amie
et que je ne vous cache rien de ce qui se passe en moi ?…
— Mais oui, mais oui, vous savez bien que j’aurais beaucoup de
peine si vous me cachiez quelque chose…
— Hé bien, je crois que j’ai trop présumé de mes forces… J’ai
peur que l’amitié que j’ai pour vous, cette profonde et loyale amitié
ne devienne quelque chose de plus grave…
Ce disant, il détourna la tête pour ne pas la gêner, et pour qu’elle
fût émue tranquillement, si elle en avait envie.
Fabienne était très émue en effet… Elle était à peu près certaine
des sentiments qu’on venait de lui exprimer. Mais il leur manquait
jusqu’alors l’officialité de l’aveu.
Elle était aimée…
… C’était effrayant. Il était effrayé, lui aussi… Mais cet effroi
commun n’avait rien de très pénible.
Après un assez long silence…
— Maintenant, dit Robert, que vous savez ce qui se passe en
moi, vous comprenez, n’est-ce pas, qu’il vaut mieux que je m’en
aille ?
Elle ne trouva qu’au bout d’un instant la façon décente de lui dire
de rester.
— Je pensais, dit-elle à voix très basse, que vous auriez assez
de force pour accepter cette contrainte. Vous devez la préférer, si
votre sentiment est sincère, vous devez la préférer, si pénible qu’elle
soit, à la résolution peu courageuse de vous en aller d’ici…
Puis, après un autre silence, d’une voix plus basse encore…
— Si vous vous dites… que… moi aussi… je connais cette
contrainte, vous aurez peut-être plus de force pour la supporter…
Ce fut son tour à lui de chavirer. Plus curieuse que lui, elle n’avait
pas tourné la tête. Elle le regarda, et ne perdit pas une goutte de son
regard heureux et languissant…
Ils avaient désormais un sujet de conversation, le plus fécond, le
plus vraiment éternel, et le plus magnifique.
Ce fut d’abord, de part et d’autre, une affirmation solennelle de la
pureté de leurs intentions. Cette volonté cornélienne de ne pas trahir
le joueur de Cabourg, que chacun d’eux s’était affirmée à lui-même,
ils se la répétèrent gravement l’un à l’autre…
Puis ils se racontèrent tout ce qu’ils avaient gardé pour eux
pendant la période de silence et d’attente. Ils se dirent comme ils
s’étaient aimés.
Elle lui avoua qu’elle savait qu’il l’aimait. Il lui fit l’aveu
correspondant. Ils se rappelèrent mille petits détails que chacun
d’eux avait remarqués sans en faire part à l’autre. On commenta
quantité d’incidents de leurs promenades en auto. Ils revécurent des
heures de retenue, des moments de doute et d’espoir. Leur
stupéfaction fut sans bornes quand ils s’aperçurent qu’il était une
heure moins le quart.
— Je croyais qu’il était à peine dix heures et demie, dit Fabienne.
Il fallait se séparer.
— Nous aurons du courage, dit-il en se levant.
Ils se sentaient désormais ligués, associés, pour une belle tâche
de vertu… Il prit son associée dans ses bras, et lui posa sur la joue,
près de la paupière, un baiser tendre et religieux, où il mit une
chasteté profonde et prolongée. Puis ce fut un second baiser, qui se
posa un peu plus bas. Il était dans les environs d’un baiser plus
intime. Il mit alors, comme par erreur, ses lèvres sur celles de
Fabienne.
L’œuvre de vertu commençait bien. Mais ils jugèrent préférable et
moins dangereux de ne pas s’en apercevoir.
IX
Le lendemain, ils se retrouvèrent à table à l’heure du déjeuner.

Robert s’était dit qu’il aurait assez d’empire sur lui-même pour ne
rien changer à son attitude vis-à-vis d’Ernest Gaudron. Mais
Fabienne, elle, serait-elle capable de cette simulation nécessaire et
courageuse ? La jeune femme l’étonna par son air de parfaite
tranquillité.
Rien ne ressemble à un innocent comme un coupable qui ne
risque rien.
Ce n’était pas pour Robert jour de courrier familial. Les deux
amis ne firent donc pas de promenades en limousine. D’ailleurs
Fabienne devait se rendre à un thé, chez une dame de Caen. Elle
s’y montra particulièrement gaie et animée.
De son côté, Robert apporta à son travail de bureau une ardeur
extraordinaire. Il aurait voulu se dire que, grâce à son acharné
labeur, à sa conscience exceptionnelle, il était la sauvegarde vivante
de la fortune d’Ernest Gaudron. Malheureusement il n’en était pas
persuadé, et pensait même que, privée de sa surveillance, la maison
Gaudron eût marché tout aussi bien.
Après le repas du soir, Ernest Gaudron se leva, une fois son café
pris, et, selon sa coutume, baisa la main de Fabienne, et serra celle
de Robert. A la stricte vérité, ils n’éprouvèrent à ces marques
d’affection et d’amitié aucune impression gênante.
Seulement, il sembla à Robert qu’au moment où ils restèrent
seuls, Fabienne ne tenait pas trop à le regarder. Ils passèrent dans
le boudoir sans s’adresser la parole.
Depuis quelques soirs, on allumait dans la cheminée un feu de
bois léger. Fabienne, debout, appuya une main sur le marbre et les
yeux baissés, considéra les bûches avec une vive attention.
Robert qui, en somme, avait bien le droit de se chauffer aussi,
s’approcha de la cheminée à son tour, et, comme il se trouvait très
près de Fabienne, il lui passa un bras derrière le dos et lui mit la
main sur l’épaule. Cette main, tout naturellement, remonta ensuite
jusqu’à la tempe de la jeune femme et amena doucement la jolie tête
blonde dans le voisinage des lèvres du jeune homme, qui, après un
stage assez court au-dessous de la paupière, descendirent ensuite,
plus délibérément que la veille, jusqu’à des lèvres qui ne se
refusèrent point : se refuser, en effet, eût conféré trop de gravité à
cette démonstration purement amicale.
Désormais, dans leurs entrevues, le baiser sur les lèvres fut
adopté comme geste de bienvenue, et aussi de congé. Ce qui ne
l’empêchait pas d’ailleurs de prendre souvent sa place au cours de
la conversation, soit à l’occasion d’une parole plus tendre, d’un
souvenir plus ému, et même sans prétexte apparent.
Ils abandonnèrent, ou semblèrent abandonner un des sujets de
leur entretien de la veille, leur résolution toujours ferme de ne jamais
tromper Ernest Gaudron. Mais cela avait été dit une fois, et avec
assez de solennité pour qu’il parût inutile d’y revenir.
Il ne manquait à ce prélude, pour que le mouvement en fût
pressé davantage, que d’être un peu contrarié. Ernest Gaudron
laissait trop de liberté à cette femme fidèle et à ce loyal ami.
L’obstacle providentiel se présenta sous les espèces d’une tante de
Fabienne, qui vint passer quelques jours chez ses neveux.
Mme Barnèche n’avait pas eu une carrière sentimentale très
agitée et très fertile en souvenirs. L’âge mûr donne cependant à des
personnes, que leur existence calme n’a point enrichies
d’expérience, une méfiance systématique : la tante jeta dès l’abord,
un regard assez inquiet sur Robert. Mais il la gagna à force de
courtisanerie.
La tante faisait un peu de musique. Une fois Ernest parti pour
Cabourg, on asseyait la brave dame au piano. Et c’était pour les
auditeurs distraits des occasions de frôlements à la dérobée, gestes
beaucoup plus faciles à accomplir quand les circonstances
interdisent de les accompagner de paroles, qui les souligneraient
dangereusement en leur donnant trop de signification.
Vers dix heures, la surveillante improvisée mollissait dans son
devoir sous l’influence du sommeil. Elle était assez corpulente, et
peu entraînée à veiller et à surveiller très tard.
Aussitôt qu’elle avait disparu, c’était comme une libération pour
Robert et pour Fabienne. Il leur semblait que légitimement il fallait
réparer le temps perdu. Alors les baisers avaient quelque chose de
plus hâtif, de plus frénétique, de plus passionné.
La chambre de la tante donnait sur la cour, en face des fenêtres
du boudoir. Un soir, Robert fit une remarque probablement ingénue :
Mme Barnèche devait certainement guetter les petits morceaux de
lumière qui filtraient au coin des rideaux baissés de leur fenêtre.
Elle s’étonnait sans doute de les voir rester ensemble si
longtemps. Ne valait-il pas mieux, pour la dépister, lui faire croire
que Robert était remonté dans sa chambre et Fabienne partie dans
la sienne ?… Si l’on éteignait l’électricité ?
Les voilà donc tous deux dans le salon obscur.
Robert, qui est allé jusqu’à la porte pour tourner le bouton
électrique, revient à tâtons auprès de Fabienne. La nuit est bien
complète, car le feu s’est éteint dans la cheminée.
Ainsi donc, Robert, assis sur un canapé dans l’obscurité, à côté
d’une dame qu’il aimait avec passion, dans une tranquillité absolue,
puisque la tante était allée se coucher, puisque Gaudron était encore
pour deux heures à Cabourg, Robert se trouvait dans des conditions
favorables pour connaître un grand bonheur.
Or, Robert n’était pas heureux.
Il fallait agir, prendre une résolution. Souhaitait-il à ce moment
d’être l’amant de Fabienne ? Il n’en était pas sûr.
Qu’attendait-elle de lui ?
N’allait-elle pas le décevoir, en continuant à la serrer dans ses
bras, sans plus, en appuyant ses lèvres sur les siennes, en un long
baiser rituel et interminable ?
Sa jeunesse lui disait de profiter de l’occasion.
Mais son expérience médiocre l’emplissait de timidité.
Il aurait voulu dire à Fabienne : Non, pas encore. Nous ne
devons pas être l’un à l’autre d’une façon aussi furtive. Il faut que
notre rapprochement ait quelque chose de plus solennel, de plus
nuptial.
Mais ces paroles mêmes, il ne pouvait guère les prononcer. Car,
en paroles, ils n’avaient pas été bien loin. C’était bien entendu qu’on
serait un jour amant et maîtresse. Mais il ne fallait pas encore se le
dire.
D’autre part, il était mal installé, et craignait de se montrer
maladroit.
Toutes ces conditions n’auraient pas pesé lourd, s’il avait eu
moins de réflexion et plus d’emportement. Mais sa réflexion
paralysait son emportement.
Ah ! les dames sont bien plus tranquilles, car elles ne sont pas
tourmentées dans des aventures de ce genre par le souci de
l’initiative. Elles n’ont, les très chères, qu’à attendre les événements.
Tout en baisant les lèvres de Fabienne littéralement à en perdre
haleine, Robert ne pouvait s’empêcher de guetter de l’oreille les
bruits du dehors. Mais M. Gaudron ne rentrait jamais avant la
fermeture du Casino.
Ce fut Fabienne qui sauva le situation. Eut-elle une sorte de
divination vague de l’embarras de Robert ? Fut-ce simplement le
besoin de respirer ? Toujours est-il qu’elle repoussa doucement le
jeune homme en murmurant :
— Il faut être sage.
Il ne se le fit pas dire deux fois… Il s’écarta de Fabienne, et sans
penser que l’obscurité l’empêchait de le voir, il passa la main sur son
front d’un air accablé et douloureux, comme un homme qui fait un
gros effort sur lui-même.
— Et d’abord, dit-elle, rallumez l’électricité.
— Mais si votre tante épie encore à sa fenêtre, que pensera-t-elle
d’une lumière qui s’éteint et se rallume ?
— Ma tante dort certainement à cette heure.
Toujours très obéissant, il alla tourner le bouton électrique. La
lumière envahit à nouveau la chambre.
Puis il revint s’asseoir à côté d’elle. Comme il était mécontent de
lui-même, il commença par prendre un air méchant.
— Mais qu’est-ce que vous avez maintenant ? demanda-t-elle
toute anxieuse.
Il parut plus accablé que jamais.
— Je crois, dit-il, que j’ai entrepris une tâche au-dessus de mes
forces… Rester auprès de vous, auprès de l’être, dit-il avec une
sombre expression romantique, auprès de l’être que j’aime par-
dessus tout, et sentir entre nous une barrière infranchissable, non,
non, j’ai trop présumé de mon courage…
— Vous m’avez pourtant bien promis que vous seriez fort…
— Oui, je sais. J’étais de bonne foi. Mais je ne savais pas
combien j’allais souffrir. Ou plutôt je m’efforçais de ne pas le savoir.
Et j’étais trop lâche pour vous quitter…
Elle murmura :
— Méchant…
— Pourquoi méchant ?
— Vous me demandez des choses impossibles…
— Je vous en supplie… Laissez-moi un petit espoir… Même si
vous croyez que ce que je désire est irréalisable, ne me le dites
pas… Laissez-moi croire qu’un jour…
— Ne me dites rien…
— Ne me dites pas non, au moins ?
— Ne me dites rien !
C’est tout ce qu’il put tirer d’elle. Il fit semblant de s’en contenter.
D’ailleurs pourquoi s’entêter, jeune homme qu’il était, à lui demander
une promesse explicite ? Comme si le consentement tacite ne devait
pas arriver à son heure ! Il eût été donné dix minutes auparavant, si
Robert avait été plus entreprenant, et s’il avait mieux su ce qu’il
voulait… Peut-être, à ce moment, dans l’obscurité, Fabienne avait-
elle eu l’impression qu’elle était sur le point de céder. Mais cela, elle
l’avait oublié déjà. Heureusement pour Robert, elle attribuait sa
résistance non à la faible insistance du jeune homme, mais à sa
propre énergie.
Le moment était venu de se séparer. Il lui donna avant de s’en
aller un long baiser, qui fut infiniment plus agréable que celui
d’avant, parce qu’ils étaient en pleine lumière, parce qu’Ernest
Gaudron n’allait pas tarder à rentrer, et parce qu’ils avaient ainsi la
sécurité de penser que cela n’irait pas plus loin.
Robert, en regagnant sa chambre solitaire, pensait que cela était
mieux ainsi, qu’ils s’aimaient trop profondément, trop religieusement
pour que leur première union fût hâtive et furtive. Il se félicita de sa
sagesse, et ne pensa plus à lui donner le nom de timidité.
Quelques instants après, ils s’endormaient, chacun de son côté,
plus épris que jamais l’un de l’autre parce qu’ils étaient arrivés à être
contents d’eux-mêmes.
Ils n’entendirent pas dans leur premier sommeil l’auto qui
ramenait M. Gaudron. Ernest alla se coucher tout doucement pour
ne pas réveiller Fabienne, qui reposait dans le chambre voisine. Il
s’endormit, lui aussi, avec satisfaction, parce qu’il s’était bien
défendu ce soir-là au baccara, et sans se douter du sursis dont il
venait de bénéficier.
Rencontrer Fabienne à l’hôtel ? C’était plein de difficultés.

Où trouver un appartement meublé convenable ?
A Cabourg, à Villers, à Deauville, bien que la saison fût très
avancée, on risquait de rencontrer des gens de connaissance.
D’autre part, on n’était pas assez sûr de la discrétion du
chauffeur.
On avait la ressource évidemment de le faire arrêter sur une
place, en lui disant : « Nous allons faire des courses, et nous
reviendrons vous retrouver ici… »
Mais tout cela n’était pas sans danger, surtout pour le prévoyant
Robert, qui n’avait pas le tempérament d’un risqueur, et à qui il fallait
une certitude mathématique d’être à l’abri de toute surprise. Or, la
certitude mathématique est bien difficile à réaliser dans de telles
circonstances.
Cependant il était nécessaire d’agir. Car il était impossible de
rester longtemps encore à l’étape où ils étaient arrivés. Le métier de
conquérant exige impérieusement une marche plus rapide.
Cette fois encore, ce fut le Destin, organisateur plein de
prévenances, qui vint en aide à ce jeune homme embarrassé.
Très heureux depuis qu’il avait chez lui ce fondé de pouvoir de
tout repos, qui surveillait sa maison et, en tenant compagnie à sa
femme, lui permettait de se rendre chaque soir sans remords à son
baccara quotidien, Ernest Gaudron ne songeait plus à s’en aller à la
Plata. Seulement la saison de Cabourg tirant à sa fin, il cherchait
une affaire de chevaux à traiter dans le Sud-Ouest, à proximité du
Casino de Biarritz.
… Il y fit une allusion vague, au cours d’un repas.
— Je vous emmènerais bien, dit-il à Fabienne, mais là-bas, je
serai obligé de circuler à droite et à gauche, et j’ai peur de vous
laisser un peu seule…
Fabienne, qui faisait de grands progrès dans la tolérance
conjugale, n’éleva aucune objection.
Ernest Gaudron sentit monter en lui un grand contentement…
Mais il ne voulut pas avoir l’air de s’en aller trop vite…
— Je vais encore télégraphier dans le midi… Si ma présence
n’est pas nécessaire…
— Oh ! elle sera nécessaire ! ne put s’empêcher de dire Fabienne
en souriant.
Il ne voulut pas remarquer ce sourire ironique, car c’eût été ouvrir
une discussion…
— S’il faut que je m’en aille, dit-il, je vous laisserai la limousine, et
je ferai la route en torpedo… A moins que… pour éviter une route si
longue… je ne me fasse conduire à Orléans pour prendre le rapide,
en laissant le chauffeur continuer tout seul jusqu’à Biarritz. Car
j’aurai besoin de la voiture là-bas.
On sembla trouver toutes ces dispositions fort raisonnables.
La tante, Mme Barnèche, était repartie vers une autre fraction de
la famille, complètement rassurée sur les intentions de Robert. Il
avait endormi son inquiétude par de constantes flatteries ; mais, tout
de même, il était temps qu’elle s’en allât, car ces flatteries
inlassables commençaient à se lasser.
Ernest s’apprêtait donc à partir avec la torpedo. Or, il se trouva
que cette voiture eut un avaro la veille du départ. Elle serait peut-
être réparée à temps. Mais Ernest, que des affaires de plus en plus
urgentes attendaient à Biarritz, ne voulut point rester dans
l’incertitude. Il proposa à Fabienne de l’accompagner en limousine
jusqu’à Orléans, où il prendrait, comme convenu, le rapide de
Bordeaux. Naturellement, on emmènerait Robert, qui pouvait bien
laisser la maison pendant un jour ou deux.
— C’est entendu comme cela, dit Ernest, sans même attendre
l’acquiescement de sa femme. Je vais téléphoner encore à la gare
des Aubrais pour m’assurer que ma place a été retenue dans le
rapide du soir… Même, ajouta-t-il en se levant de table, je vais
téléphoner du bureau, parce que d’ici je n’ai pas facilement les
communications interurbaines.
Il se sauva, avec la légèreté d’un écolier en vacances. Robert et
Fabienne passèrent dans le boudoir et s’embrassèrent tendrement.

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Principles of Economics 2nd Edition

Mateer Test Bank

3. A firm can be identified as practicing price discrimination when

4. Which of the following best describes price discrimination?

7. For a firm to be able to practice price discrimination, it must be a

9. Which of the following conditions is a requirement for price discrimination?

11. Which of the following statements is true?

12. A firm cannot price discriminate if it

15. Which of the following is necessary for price discrimination to occur?

17. The hotel attempts to distinguish between groups of buyers in order to

22. Firms are most likely to engage in price discrimination if

a. The airline wants to attract more business executives as customers.

27. Firms engage in legal price discrimination if they

30. One benefit of price discrimination is that

33. Firms engage in price discrimination primarily to

36. Perfect price discrimination occurs when a firm is able to

Refer to the following table to answer the following questions:

92. An outlet mall tends to be more attractive to shoppers who have

107. An example of price discrimination is when

119. In a price-discrimination setting, people with the most inelastic demand

123. Which of the following situations is considered price discrimination?

127. How does coupon clipping allow for price discrimination?

128. What is the primary benefit of price discrimination?

130. A potential complication for successful price discrimination is

DIF: Moderate REF: Conditions for Price Discrimination

DIF: Difficult REF: Conditions for Price Discrimination

DIF: Moderate REF: What Is Price Discrimination?

DIF: Moderate REF: Price Discrimination on Campus

DIF: Difficult REF: The Welfare Effects of Price Discrimination

DIF: Difficult REF: The Welfare Effects of Price Discrimination

DIF: Moderate REF: What Is Price Discrimination?

DIF: Moderate REF: Price Discrimination on Campus

DIF: Moderate REF: Price Discrimination on Campus

DIF: Moderate REF: Conditions for Price Discrimination

13. List and explain the conditions for price discrimination.

DIF: Moderate REF: Conditions for Price Discrimination

DIF: Difficult REF: Distinguishing Groups of Buyers

DIF: Difficult REF: Distinguishing Groups of Buyers

16. Explain the welfare effects of perfect price discrimination.

DIF: Moderate REF: The Welfare Effects of Price Discrimination

17. Explain the welfare effects of price discrimination.

DIF: Easy REF: Distinguishing Groups of Buyers

DIF: Easy REF: Distinguishing Groups of Buyers

20. List three examples of retail price discrimination.

DIF: Easy REF: How Is Price Discrimination Practiced?

21. How do grocery stores practice price discrimination?

DIF: Easy REF: How Is Price Discrimination Practiced?

DIF: Difficult REF: Distinguishing Groups of Buyers

DIF: Moderate REF: Distinguishing Groups of Buyers

DIF: Moderate REF: Distinguishing Groups of Buyers

DIF: Difficult REF: How Is Price Discrimination Practiced?

Un mari complaisant n’aurait certes pas aussi bien favorisé les

Pour que, vis-à-vis de ses parents, le secret de la résidence de

Le lendemain, ils se retrouvèrent à table à l’heure du déjeuner.

Rencontrer Fabienne à l’hôtel ? C’était plein de difficultés.

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