In markets where consumers are price insensitive, price discriminators should charge higher prices than in markets where consumers are price sensitive.

Question

Quizplus · Accepted Answer

When consumers are price insensitive, they are willing to pay higher prices for a product regardless of the actual cost. In this scenario, a price discriminator can charge higher prices and still maintain a steady demand for their product. On the other hand, in markets where consumers are more price sensitive, increasing the price would lead to a decrease in demand. Therefore, price discriminators should charge lower prices in price-sensitive markets.

In Markets Where Consumers Are Price Insensitive, Price Discriminators Should