He’ll Eat Anything
Oftentimes, Subway restaurants run specials in which a different type of sandwich is discounted on each day of the week. Such specials constitute price discrimination in that an individual’s bill is based partly on his or her willingness to eat the sandwich on special. “Picky eaters,” those who go specifically to Subway for a specific type of sandwich, pay a relatively high price for a Subway sandwich on most days. That is, they take advantage of the special only when it applies to their favored sandwich. “Flexible eaters,” those who will eat anything at any restaurant, are charged a relatively low price. This type of consumer always takes advantage of the special when eating at Subway.
Such specials are beneficial to Subway in that they allow the restaurant to draw in additional customers without sacrificing much profit from “picky eaters.” The specials allow Subway to maximize the sum of profits from two market segments.
-SS
