Sunday, July 3, 2011
Price Discrimination with Kids Menus?
I found an article online that claimed that restaurants practice price discrimination by having kids menus and by charging cheaper prices for those items and not letting adults order from them. The definition of price discrimination is the selling of a product to different buyers at different prices when the price differences are not justified by differences in cost. Now when I think of price discrimination in a monopoly, it is about one uniform product or service. Often times kids menu items are way smaller and not as taxing to prepare or most likely do not include as expensive ingredients of that in an adult meal..its like comparing a small portion of chicken fingers and fries to a full course meal for an adult that might often include a appetizer, entree and even dessert. In my opinion this is not a good representative for price discrimination because clearly the units in comparison are not the same or uniform in a sense. My main argument would be that in most cases the kids meals are smaller and are cheaper for the restaurant to produce compared to adult items, which of course would cost the restaurant more money and effort to make, which justifies the cheaper kids meal prices. It would be different if the adult items and the kids items were identical in portion and were on the the same accord as far as how much and what exactly is being served..but as far as I know, as of now there is a significant divide between the two.
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You could not have put it any better because the kids meals do come with less but are only a few dollars less than the adults. The idea of a kids meal is suppose to be enough food to fill the kid but also in a range where its worth the parents to buy taking into consideration that some people have more than one kid. For example one adult cost $8.50 with 2 kids at $6.50 is a total of $21.50 that a single parent would have to pay only to feed them again in a couple hours.
ReplyDeleteAgreed that you cant really call kids menu;s a type of price discrimination. However you could argue that senior pricing for the same item at a restraunt would be price discrimination.
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