Booksellers are able to charge ________ prices to consumers who buy hardback books because their demand for the book is more ________ than consumers who wait until the paperback comes out.
A) lower; inelastic
B) lower; elastic
C) higher; elastic
D) higher; inelastic

Question

Quizplus · Accepted Answer

Booksellers are able to charge higher prices to consumers who buy hardback books because their demand for the book is more inelastic than consumers who wait until the paperback comes out. This means that those who are willing to buy the hardback version are willing to pay a higher price for it, despite the availability of a cheaper alternative later on. Therefore, the demand for hardback books is less affected by price changes, making it more inelastic.

Booksellers Are Able to Charge ________ Prices to Consumers Who