Under what circumstances will a price-discriminating monopolist tend to charge a higher price to senior citizens?
A) If it believes senior citizen demand is more inelastic than other demanders.
B) If it believes senior citizen demand is more elastic than other demanders.
C) If it believes senior citizen demand is unit elastic.
D) If it believes senior citizen demand is graphically represented by a horizontal curve.

Question

Quizplus · Accepted Answer

If the price-discriminating monopolist believes that the demand of senior citizens is more inelastic than other demanders, it will tend to charge a higher price to them as they are willing to pay a higher price for the good without reducing their quantity demanded significantly. This allows the monopolist to extract more consumer surplus from senior citizens.

Under What Circumstances Will a Price-Discriminating Monopolist Tend to Charge