A woman complained to "Dear Abby" that a laundry charged $1.25 each to launder and press her husbands shirts, but for her shirts- the same description, only smaller- the laundry charged $3.50. When asked why, the owner said."women's houses cost more." Abby suggested sending all the shirts in one bundle and enclosing a note saying, "There are no blouses here- these are all shirts."
a. Is the Laundry practicing price discrimination, or is there really a 2.25 difference in cost?
b. Assuming the laundry is engaging in price discrimination, why do men pay the lower price and women the higher?
c. Could the laundry continue to separate markets if people followed Abbys advice? What about the policing costs associated with separating the markets?
This question was answered on: Sep 21, 2023
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