Question 1: Some charge that third degree price discrimination is unfair or that it reduces social welfare. Why does charging one group a lower price hurt anyone? Please explain.
Question 2: McDonald's charges a higher price for a Big Mac in New York City than it does in a small town in Iowa. Is this an example of third degree price discrimination?
Question 3: In the Sunday newspaper, there are usually coupons that you can clip and take to the store to save money on products. Anyone can buy a newspaper, and the value of the coupons eaisly exceeds the price of the newspaper for most consumers. Is this an example of price discrimination? Please Explain.
Question 4: Would it ever make sense for a firm to charge a price at or below the cost of the product. Please Explain.