45 grocery store chain often set consumer-specific price by, Ask an Expert

Economics

4.5 Grocery store chain often set consumer-specific price by issuing frequent –buyer cards to willing customers and collecting information about their purchases. Grocery chains can use that data to offer customized discount coupons to individuals.

a. Which type of price discrimination –perfect, group, or nonlinear- are these personalized discounts?

b. How should a grocery store use past-purchase data to set individualized prices maximize its profit? (Hint: refer to a customer’s price elasticity of demand.)

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91401717

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