Even when gas stations and grocery stores are close enough to share a parking lot, gas stations will typically charge much more for candy bars. This kind of price discrimination occurs because grocery store patrons have a:
A) higher demand curve.
B) lower demand curve.
C) more elastic demand curve.
D) less elastic demand curve.

Question

Quizplus · Accepted Answer

Grocery store patrons have a more elastic demand curve for candy bars as they have the option to purchase them at the grocery store for a lower price. Gas stations charge more since they have a captive audience who may be willing to pay the higher price due to convenience or lack of options.

Even When Gas Stations and Grocery Stores Are Close Enough