Donna owns the only dog grooming salon on Lonely Island. If Donna can price discriminate between dog owners who are seniors and those who are not, her economic profit will be ________ than if she does not price discriminate and the number of dog groomings will be ________ than if she does not price discriminate.

Question

Quizplus · Accepted Answer

Price discrimination allows Donna to capture more consumer surplus by charging different prices to different groups, increasing her economic profit. It also typically increases the quantity of services sold, as more consumers are able to purchase at prices they are willing to pay.

Donna Owns the Only Dog Grooming Salon on Lonely Island