If the demand for a newly released novel is less price-elastic than the demand for an older novel, which of the following pricing strategies would a price-discriminating publishing firm follow?
A) Sell newly released novels and older novels for the same price.
B) Set price according to the marginal cost of printing the novels.
C) Charge a higher price for newly released novels.
D) Charge a higher price for older novels.

Question

Quizplus · Accepted Answer

A price-discriminating firm would charge a higher price for the newly released novel because its demand is less price-elastic, meaning consumers are less sensitive to price changes and willing to pay more.

If the Demand for a Newly Released Novel Is Less