The local coffee shop and bakery near my apartment in Berlin charges €1 for an excellent cup of coffee. The similar shop near my office, but on a main tourist street, charges €1.99 for an equal quality cup. Similar quality coffee can be had for €1.50 at a bakery one block from my office in another direction, in a less touristy area with many office buildings. I can explain the €0.50 difference from my local shop to the third shop as cost-based discrimination: I assume higher real-estate prices generate it. The €0.50 difference between the two shops near my office must be mainly due to demand-based discrimination: Tourists are unwilling to search, implicitly have a low demand elasticity and are an easy mark for the shopkeeper.