Price Discrimination Practice Test

A monopolist software company sells the same downloadable program. It offers a “Standard” license for $50 and a “Pro” license for $80; both run the same core program, but the Pro license includes extra features that mainly appeal to high willingness-to-pay users. The firm does not directly observe each buyer’s willingness to pay, and it prevents resale with license keys tied to accounts. Based on the monopolist’s pricing strategy, which condition makes this pricing strategy possible?

A campus gym is the only gym within walking distance. It charges $200 per semester for students and $350 per semester for faculty, and it uses university ID cards to verify status and prevent resale. Students’ demand is more elastic than faculty demand. Based on the monopolist’s pricing strategy, which type of price discrimination is illustrated?