When setting prices for different groups of customers, a manager should charge higher prices to groups that have _____ and lower prices to groups that have _____.
A)higher marginal benefit; lower reservation prices
B)more elastic demand; more inelastic demand
C)higher reservation prices; more inelastic demand
D)lower reservation prices; lower marginal benefit

Question

Quizplus · Accepted Answer

A manager should charge higher prices to groups that have higher marginal benefit because they value the product more and are willing to pay more for it. Lower prices should be charged to groups with lower reservation prices because they are not willing to pay as much for the product.

When Setting Prices for Different Groups of Customers, a Manager