Some pizza joints charge more for delivered pizza than if customers pick up the pizza at the restaurant. Explain how this might be an example of third-degree price discrimination and provide another explanation for this pricing difference other than price discrimination.

Some pizza joints charge more for delivered pizza than if customers pick up the pizza at the restaurant. Explain how this might be an example of third-degree price discrimination and provide another explanation for this pricing difference other than price discrimination.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter14: Monopoly

Section14.4: Price Discrimination

Problem 4QQ

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Concept explainers

Price Discrimination

Price discrimination or differential pricing is based on the principle that the seller will charge the buyer a price based on the buyer’s ability and willingness to pay for the product rather than applying uniform pricing for all.

Question

Some pizza joints charge more for delivered
pizza than if customers pick up the pizza at
the restaurant. Explain how this might be an
example of third-degree price discrimination
and provide another explanation for this
pricing difference other than price
discrimination.

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