π Sunscreen price discrimination?
Turning to more precise language, the price elasticity of demand tends to be lower for items that take up a smaller portion of our budget. If, for any reason, the price elasticity of demand is lower for childrenβs sunscreen compared to adult sunscreen, it could be profitable for a firm to develop two lines of sunscreen to engage in third degree price discrimination. This could be profitable even in the absence of any other reason to offer different sunscreens to adults and children.
βDoes anyone know of significant chemical differences between childrenβs sunscreen and adult sunscreen? My wife noted that they have identical ingredients in identical order. Certainly, it would be more convenient for families to only have to carry one bottle rather than two.
(Independent of whether there are scientific reasons to formulate different ingredient ratios for children and adults, I hope itβs still interesting to consider the price discrimination aspect.)
Feedback? Email munger.e1010@gmail.com π§. Be sure to mention the page you are responding to.