Suppose the elasticity of demand for tickets to Broadway shows is 2.0 for men and 0.3 for women.To use price discrimination to increase profits,the producers should charge lower prices to _____ because their demand is more _____.
A)men;elastic than that of women
B)men;inelastic than that of women
C)women;elastic than that of men
D)women;inelastic than that of men

Question

Quizplus · Accepted Answer

The producers should charge lower prices to men because their demand is more elastic (with an elasticity of 2.0) than that of women (with an elasticity of 0.3). This means that a small change in price will have a bigger effect on the demand for Broadway tickets for men compared to women. By charging lower prices to men, the producers can attract more male customers and increase their profits.

Suppose the Elasticity of Demand for Tickets to Broadway Shows