Chantal owns a hairdressing salon which caters to two main groups of customers: residents of "The Chateau," a retirement community, and other residents in the neighborhood. Figure 15-17 shows the demand curves for the residents of the retirement community, labeled Market A, and other residents in the neighborhood, labeled Market B. The demand curves are not identical.
-Refer to Figure 15-17. Suppose Chantal charges all her customers a uniform price of $10 for a haircut. Which of the following statements is true?

Question

Quizplus · Accepted Answer

Without access to Figure 15-17, we can deduce that if Chantal charges a uniform price of $10 for a haircut, and this choice suggests she is selling more than the profit-maximizing quantity in market B, it implies that at the profit-maximizing quantity, the price would be higher than $10. Charging a uniform price lower than the profit-maximizing price in market B means she is likely attracting more customers than she would if she were maximizing profits, but earning less per haircut. This scenario suggests she's not operating at the most profitable point, which would involve adjusting prices and quantities sold to align with the demand in each specific market if she were price discriminating.

Chantal Owns a Hairdressing Salon Which Caters to Two Main