Answer to Question #71091 in Microeconomics for Mubarak

Question

Coca-Cola developed a vending machine that would sense the temperature and then
charge higher prices when it was hotter–a response to the increase in demand and the
Group
Assignment
Page 2 of 3
decrease in the elasticity of demand. Consumers found out about the new technology
and were outraged, causing Coca-Cola to shelve the idea.
2a) When does a firm have an opportunity to charge different prices to different
consumers?
2b) What Determines Price Elasticity of Demand for Coca-Cola? Explain and
provide graph illustration.