Question: In Example 11.1 (page 408), we saw how producers of processed foods and related consumer goods use coupons as a means of price discrimination. Although

In Example 11.1 (page 408), we saw how producers of processed foods and related consumer goods use coupons as a means of price discrimination. Although coupons are widely used in the United States, that is not the case in other countries. In Germany, coupons are illegal.
a. Does prohibiting the use of coupons in Germany make German consumers better off or worse off?
b. Does prohibiting the use of coupons make German producers better off or worse off?

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a In general we cannot tell whether consumers will be better off or worse off Total consumer surplus can increase or decrease with price discriminatio... View full answer

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