Other things being equal, a price-discriminating firm will charge less to the customers who
A) have the lowest incomes.
B) have the least elastic demand for its product.
C) have the most elastic demand for the product.
D) are the most rational in making their decisions.

Question

Quizplus · Accepted Answer

A price-discriminating firm will charge less to customers who have the most elastic demand for the product because these customers are more sensitive to price changes and would decrease their quantity demanded significantly in response to price increases.

Other Things Being Equal, a Price-Discriminating Firm Will Charge Less