Music festivals around the world have not occurred for almost two years. But with COVID-19 vaccination programs under way and mass testing available across the world, fans are confident that they will soon be able to attend music festivals without risk. One of the biggest electronic music festivals in Europe, Untold Romania, is taking a chance, and will be the first music festival to open its gates. Untold organizers charge different prices for a four-day package, depending on customer preference: General Basic Access is €159, General Flexi Access is €174, and VIP Access is €399; all passes have additional taxes. If customers want to buy tickets at the entrance, they will need to pay €199 for General Basic Access and €214 for General Flexi Access. However, VIP Access remains the same, as do taxes for all categories.

a. Briefly explain how Untold Romania organizers are practicing price discrimination to increase profit.

b. Can this pricing policy be considered a form of price discrimination? If so, which people are likely to pay the higher ticket prices, and which people the lower ticket prices?