Economics
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Question from Past Microeconomics Qualifying Exam[]

Spring 2006 - Section I, Question nine, George Mason University

Price discrimination tends to be more common in the sale of services (e.g., medical and transportation services) than in the sale of manufactured goods.

Answer[]

True. Tangible goods, for the most part, can be resold in secondary markets, and thus it is very difficult to price discriminate in the abscence of legal restrictions. An example would be concert tickets, where many states have "anti-scalping" laws, which would allow some degree of discrimination to take place.

For services and other intangible goods which are consumed on the spot, there is no opportunity for resale of the good. Price discrimination will be more common compared with the manufactured goods case.

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