Price discrimination leads to a _______ price in the market with a _______ demand.

Question

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different customers for the same product. This results in some customers paying a lower price than others. Customers who are willing to pay a higher price for a product will do so, while those who are not willing to pay the higher price will either purchase a substitute product or not purchase the product at all. This means that demand is more elastic under price discrimination, as consumers have more options and are more likely to switch to substitutes if prices are too high. As a result, prices tend to be lower in markets with price discrimination and demand is more elastic.

Price Discrimination Leads to a _______ Price in the Market