Market Structures Supply & Demand

Wedding Premium

Garret notices that the store sells two dresses that look identical, but one is marketed as a white dress and the other is a white wedding dress. The wedding dress costs $200, but the other dress only costs $30. The wedding industry is notorious for high markups on products that are labeled for weddings because brides and grooms often have fairly inelastic demand for their products. Because of this inelastic demand, firms are able to price discriminate and charge higher prices.