Y13 Homework: Price Discrimination

Please answer the following questions and submit your work in class on Friday 13th November.

  1. ‘On a typical train journey, there could be as many as twenty different fares being paid by passengers travelling between the same two stations.’  Using the concept of price discrimination to help you, explain how and why this might happen. (15 marks)
  2. Is price discrimination always good for producers and bad for consumers? Justify your answer. (25 marks)

If you need help, I’m happy for you to arrange some time with me. Let me know by email.

Kieran: a special question for you…

  • Explain the economic principles that underpin road pricing. [15]
  • Discuss the extent to which the proposed national system of road user charging announced in July 2005 might lead to a more efficient allocation of resources. [20]
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