Which of the following statements is correct?

Question

Quizplus · Accepted Answer

To maximize profit, a price discriminator distinguishes groups with different demands and charges higher prices to those with the more inelastic demand. This is because customers with inelastic demand are less likely to change their purchasing behavior based on changes in price, allowing the discriminator to charge a higher price without losing the customer's business. In contrast, customers with elastic demand are more likely to switch to a competitor or forego the purchase altogether if the price is too high, so the discriminator would want to charge a lower price to this group to ensure they still make a sale. Statements A, B, and C are incorrect. Price discrimination may not always be more profitable than charging a single price, as it may require additional resources and market segmentation. A price discriminator may want to charge lower prices to those with more elastic demand, not higher prices. Lastly, facilitating resale between high- and low-price groups is not essential for successful price discrimination.

Which of the Following Statements Is Correct