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Trinity and Brandon are 10 year-olds who have a lemonade stand on a busy beach and would like to practice price discrimination. They know that
Trinity and Brandon are 10 year-olds who have a lemonade stand on a busy beach and would like to practice price discrimination. They know that they are the only sellers of lemonade on the beach and that adults have a less elastic demand for lemonade than kids so they decide to sell their lemonade for $0.25 to kids and $0.50 to adults. Will their price discrimination be successful? Why or why not? a. No, the kids who buy their lemonade can practice arbitrage. b. Yes, the only necessary condition is that they know the relative elasticities of the market segments. c. No, Trinity and Brandon are price takers. d. Yes, they have all of the necessary criteria to successfully price discriminate
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