Reese Witherspoon plans to visit her hometown of New Orleans, Louisiana. When he

Question

Reese Witherspoon plans to visit her hometown of New Orleans, Louisiana. When her assistant checked the hotel reservation website, there were four published rates available, which are summarized in the following table. Use this table to answer the following questions: Best-available rate $289 90-day advance purchase $230 AARP member rate $260 Military/government rate $135 Why would the hotel require a guest to provide appropriate identification to receive the American Association of Retired Persons (AARP) member rate, the military rate, or the government rate?

Question 42 options: A. to prevent resale of discounted rooms to other buyers who are not eligible for the discounted price B. to honor those who serve in the military and offer support to the troops C. to encourage active membership in AARP D. to ensure that distinguished government guests are assigned the appropriate costs E. to limit the number of patrons who receive each type of rate

Explanation / Answer

It appears that the hotel is using the price discrimination as a technique to separate different consumer group. It is offering discount to the group so that have somewhat elastic demand so identification is required to separate different groups with different elasticities and to prevent the resale of discounted rooms

Select option A

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