One company sells underpads that can be used on the beds of people who are ill or the sleeping area for dogs that are being house trained. The packages for dogs are different and have a different brand name than the packages for people, but the pads in the packages are identical. Recently on Amazon, the company was selling the pads for dogs at a price that was 11 percent higher than the price they charged for the pads for people.
a. How is the company able to price discriminate in this situation?
b. Why would the company sell the pads for dogs at a higher price than the pads for people?