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 a monopolist to capture more consumer surplus by charging different prices to different groups based on their willingness to pay. This increases the monopolist's economic profit and can also increase the quantity sold if it allows price-sensitive customers (who might not have purchased at a higher uniform price) to buy the product at a lower price.

Donna Owns the Only Dog Grooming Salon on Lonely Island