Sam McDonald, Chapter 1, #2

The results of the free market described in this chapter effects my life and the lives of all americans significantly. What comes foremost to my mind is the example of the airline companies and their use of "price discrimination". Airline companies sell tickets that will give customers the exact same experience, but the prices fluctuate for each ticket. The airlines know that some people are willing to pay in the tens of hundreds, while others will only pay a couple hundred for a ticket. In their act of rational self interest, the airline companies have developed a system where they can maximize their profits by selling tickets to each type of customer. This concept is, in fact, not repudiated by other companies, and is a prevalent strategy in free market firms. Price discrimination can directly affect my life, especially with the increase of technology. New types of technology specifically designed to gather information such as: where do you live, what are your interests, and what is your job, have been developed and are used by companies to target individuals with specific prices relating to how much each individual is able/willing to pay. As information gathering technology increases, the ability companies have to gather information about their customers and effectively charge them different prices will rise exponentially. As a customer to various businesses, price discrimination affects my life now through every product I buy, and will continue to have a greater effect in the future.