Question

Firms who are attempting to engage in price discrimination will offer customers with a​ ________ demand a higher price and customers with​ a(n) ________ demand a lower price.

Answer 1

Answer: Less elastic

More elastic

Explanation: Price discrimination in simple words is the situation in which the producer of the commodity charges different prices from different individuals for the same commodity.

If the demand for a particular commodity is less elastic for a consumer, then there is high chance that he will not shift his demand to other product due to high price.

But a more elastic demand suggest that the consumer is not very used to for the product and can shift demand from high prices.

Thus, firms will charge high prices from less elastic customer and low prices from more elastic customers.