• Apple typically sells different “versions” of the iPhone and iPad—in particular, currently (as of May 12, 2021) Apple sells four versions of the iPad: iPad Pro (starting at $799), iPad Air (starting at $599), iPad (starting at $329), and iPad Mini (starting at $399) (https://www.apple.com/ipad/). Note that the features vary between the products; the largest capacity hard drive space for the Pro is 2 TB, for the Air it is 256 GB, and for the iPad it is 128GB. The processors are also similarly arranged, with the most powerful M1 chip in the Pro, the A14 chip in the Air, and the A12 chip in the iPad.
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• There are other such differences in the display and camera, among potentially other components. Scenario 2
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• Questions
• Briefly explain why continuing to sell the older models when the newer generation’s models are introduced is an example of price discrimination. How does this help Apple reach a larger market? Why are the lower-tier models currently available with only the 128GB hard drive, when previously (when they were the top-of-the-line models) they were available with larger hard drives? When the iPad mini was first introduced, industry experts estimated that for every 4 million iPad minis that were sold, sales of the full-sized iPad would decrease by 1 million units. Assuming that is the case, explain why introducing the iPad mini was a good idea, even with some level of cannibalization.

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Price discrimination is a pricing strategy that involves setting different prices for the same produ... View the full answer