Suppose a monopoly can separate its customers into two groups. If the monopoly practices price discrimination, it will charge the higher price to the group:
A)that are especially price sensitive.
B)that value the product more.
C)with fewer close substitutes.
D)The answer cannot be determined with the information given.

Question

Quizplus · Accepted Answer

A monopoly practicing price discrimination will charge a higher price to the group that values the product more, as they are less sensitive to price changes and willing to pay more.

Suppose a Monopoly Can Separate Its Customers into Two Groups