A price-discriminating monopoly charges the lowest price to the group that:
A) has the most elastic demand.
B) purchases the largest quantity.
C) engages in the most arbitrage.
D) is least responsive to price changes.

Question

Quizplus · Accepted Answer

A price-discriminating monopoly charges the lowest price to the group that has the most elastic demand because that group is the most price-sensitive and will therefore respond the most to a lower price, resulting in an increase in total revenue for the monopoly.

A Price-Discriminating Monopoly Charges the Lowest Price to the Group