An oligopoly that engages in price discrimination will charge higher prices to customers with the most inelastic demand.

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Price discrimination involves charging different prices to different groups of customers based on their willingness to pay. In an oligopoly, where there are only a few large firms dominating the market, pricing decisions can have a significant impact on profitability. If the oligopoly engages in price discrimination, it will charge higher prices to customers with the most inelastic demand, meaning that they are less sensitive to changes in price. This allows the firm to extract more revenue from these customers while still being able to attract more price-sensitive customers with lower prices.

An Oligopoly That Engages in Price Discrimination Will Charge Higher