The textbook for your economics class is available in an American version and in a much cheaper Indian version that has the same text but no colors for the graphs (the difference in prices is much higher than the difference in costs). Why is this the case?
A) Demand in the United States is much more inelastic than demand in India.
B) Demand in the United States is much more elastic than demand in India.
C) No one in India has any use for color graphs.
D) There are more substitutes for your textbook in the United States.

Question

Quizplus · Accepted Answer

The price difference is due to price discrimination, where the publisher charges a higher price in the U.S. because demand is more inelastic, meaning consumers are less sensitive to price changes compared to India.

The Textbook for Your Economics Class Is Available in an American