Donna owns the only dog grooming salon on Lonely Island.If Donna can price discriminate between dog owners who are seniors and those who are not,her economic profit will be ________ than if she does not price discriminate and the number of dog groomings will be ________ if she does not price discriminate.
A)greater;more than
B)greater;less than
C)less;more than
D)less;less than
E)greater;the same as

Question

Quizplus · Accepted Answer

By price discriminating, Donna can charge seniors a higher price while still attracting non-seniors with a lower price. This allows her to capture more of the consumer surplus and therefore increase her economic profit. The number of dog groomings may actually increase as well because some seniors who may have been priced out at a single high price may now be able to afford the lower senior price, leading to more overall demand.

Donna Owns the Only Dog Grooming Salon on Lonely Island