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Suppose a Producer Is Able to Separate Customers into Two

Question 217

Multiple Choice

Suppose a producer is able to separate customers into two groups,one having an inelastic demand and the other having an elastic demand.If the producer's objective is to increase total revenue,she should


A) increase the price charged to customers with the elastic demand and decrease the price charged to customers with the inelastic demand.
B) decrease the price charged to customers with the elastic demand and increase the price charged to customers with the inelastic demand.
C) decrease the price to both groups of customers.
D) increase the price for both groups of customers.

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