For a firm to maximize total profits through price discrimination,it should
A)Charge a high price to consumers with an inelastic demand and low price to consumers with an elastic demand
B)Charge a low price to consumers with an inelastic demand and high price to consumers with an elastic demand
C)Charge the same price to both sets of consumers
D)Charge nothing to both set of consumers-throw a party

Question

​For a firm to maximize total profits through price discrimination,it should
A)​Charge a high price to consumers with an inelastic demand and low price to consumers with an elastic demand
B)Charge a low price to consumers with an inelastic demand and high price to consumers with an elastic demand
C)Charge the same price to both sets of consumers
D)​Charge nothing to both set of consumers-throw a party

Quizplus · Accepted Answer

Price discrimination involves charging different prices to different consumers based on their willingness to pay. Charging a high price to those with inelastic demand (who are less sensitive to price changes) and a low price to those with elastic demand (who are more sensitive to price changes) maximizes total profits by capturing more consumer surplus.

​For a Firm to Maximize Total Profits Through Price Discrimination,it

For a Firm to Maximize Total Profits Through Price Discrimination,it