Price-discriminating firms will impose a price structure that offers customers with a _____ demand a _____ price and offers customers with a(n)_____ demand a _____ price.
A)less elastic;lower;more elastic;higher
B)less elastic;higher;more elastic;lower
C)lower;higher;higher;lower
D)seasonal;lower;unchanging;higher

Question

Quizplus · Accepted Answer

Price-discriminating firms aim to charge higher prices to customers with more elastic demand and lower prices to customers with less elastic demand. This is because customers with inelastic demand are willing to pay a higher price for the product, while customers with elastic demand will only purchase the product if the price is low enough. Therefore, choice B is the correct answer, as it offers a higher price to customers with more elastic demand and a lower price to customers with less elastic demand.

Price-Discriminating Firms Will Impose a Price Structure That Offers Customers