Suppose you are a producer that sells products to two groups of buyers. These groups of buyers have no contact with one another. Group 1 has a relatively elastic demand curve and group 2 has a relatively inelastic demand curve. If your goal is to maximize total revenue you should A) charge group 1 a lower price than group 2 B) charge group 2 a lower price than group 1 C) charge both groups the same price D) increase the price to both groups
Suppose you are a producer that sells products to two groups of buyers. These groups of buyers have no contact with one another. Group 1 has a relatively elastic demand curve and group 2 has a relatively inelastic demand curve. If your goal is to maximize total revenue you should A) charge group 1 a lower price than group 2 B) charge group 2 a lower price than group 1 C) charge both groups the same price D) increase the price to both groups
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter14: Indirect Price Discrimination
Section: Chapter Questions
Problem 3MC
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Suppose you are a producer that sells products to two groups of buyers. These groups of buyers have no contact with one another. Group 1 has a relatively
A) charge group 1 a lower
B) charge group 2 a lower price than group 1
C) charge both groups the same price
D) increase the price to both groups
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