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CA Foundation · Business Economics · Price Determination in Different Markets

A cinema hall in Pune charges ₹150 per ticket for weekday matinee shows and ₹300 for weekend evening shows, although the cost of showing the film is the same. This is best described as price discrimination based on:

This is price discrimination based on time. The same service with identical cost is sold at different prices to different groups at different times, because weekend evening demand is less elastic than weekday matinee demand. It is not first-degree or cost-based pricing.

  1. ATime of purchase or consumption, charging different prices to different groups at different timesCorrect
  2. BQuantity purchased, where a bulk discount is given
  3. CPerfect first-degree discrimination, charging each viewer their maximum willingness to pay
  4. DCost-based pricing reflecting different production costs

Explanation

The same service is sold at different prices at different times because demand elasticity differs across time periods. This is third-degree discrimination by time. It is not first degree since not every buyer is charged an individual maximum price, and the cost is the same so it is not cost-based.

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