A dry cleaner has a sign in its window: Free Internet Coupons. The dry cleaner lists its
Question:
A dry cleaner has a sign in its window:
“Free Internet Coupons.” The dry cleaner lists its Web site, and indeed there are good discounts available with the coupons. Most customers don’t use the coupons.
a. What probably would be the main difference between customers who use the coupons and those who don’t?
b. Some people might think “The dry cleaner offers the coupons to get people in the door to try the place out, but then the customers will pay the normal high price afterward.”
But the coupons are always there, so even repeat customers can keep using the coupons.
Is this a mistake on the business owner’s part?
Hint: Think about marginal cost. ko56
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