32.5k views
2 votes
In the price discrimination model, the group with fewer options

A.has a lower opportunity cost
B. has a relatively inelastic demand
C. gets charged a lower price
D. A and B only
E. A and C only

1 Answer

6 votes

Final answer:

In the context of price discrimination, the group with fewer options has a relatively inelastic demand and is thus less sensitive to price changes, allowing businesses to charge them higher prices.

Step-by-step explanation:

In the price discrimination model, the group with fewer options typically has a relatively inelastic demand. This means that the percentage change in demand for their product or service is smaller when compared to a percentage change in price. Consequently, because this group is less sensitive to price changes, businesses often charge them a higher price. Empirically, a demand curve that is inelastic will have an elasticity value of less than one. Therefore, the correct answer to the question is that the group with fewer options B. has a relatively inelastic demand.

User Rusheb
by
7.7k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories