Question

Jordan's food truck sells tacos and burritos. Her most popular items are chicken tacos and beef tacos. Bean burritos are the least popular item on her menu, although some buyers like the burrito's large size compared to the tacos. The tacos and the burritos both sell for $4. Jordan offers a special deal of a taco and a bean burrito for $7. How is this a form of price discrimination?.

Answer 1

Jordan's food truck exhibits price discrimination by offering a taco and bean burrito for $7 combined, which incentives customers through a perceived value deal, appealing to different consumer preferences.

Step-by-step explanation:

Jordan's food truck using a special pricing deal where a taco and a bean burrito are offered together for $7, when individually they sell for $4 each, is an example of price discrimination. This strategy can appeal to different consumer preferences and increase sales by offering a perceived value deal. In this case, customers who prefer both items may feel they are getting a better deal through the combination pricing, while others may be attracted to the lower combined price even though they might not have purchased the bean burrito separately due to its lower popularity.

Answer 2

This is a form of price discrimination because Jordan is offering different prices for different combinations of items. By offering a special deal, she can target different segments of customers and maximize her profits.

Step-by-step explanation:

This is a form of price discrimination because Jordan is offering different prices for different combinations of items. By offering a special deal of a taco and a bean burrito for $7, Jordan is enticing customers who might not normally buy a burrito to purchase it alongside a taco. This allows Jordan to target different segments of customers and maximize her profits.

In this case, the price of the taco and burrito combination is lower than if the items were purchased separately, which incentivizes customers to choose the special deal. Customers who prefer tacos might not be interested in buying a burrito at the regular price, but when it is bundled with a taco at a discounted price, they may be more willing to make the purchase. By offering different prices for different combinations, Jordan is able to capture a wider range of customers and cater to their preferences, increasing her overall sales and revenue.