Many supermarkets provide regular shoppers with loyalty cards that the shoppers swipe each time they check out.
Question:
a. Is the use of loyalty cards that provide the same price discounts for every shopper who uses them a form of price discrimination? Briefly explain.
b. Why would making price discounts depend on a shopper's buying history involve "elasticity at a household level"? What information from a shopper's buying history would be relevant in predicting the shopper's response to a price discount?
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