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Author Question: The strategy underlying price discrimination is to: a. charge higher prices to customers who have ... (Read 69 times)

Hungry!

  • Hero Member
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on: Jun 30, 2018
The strategy underlying price discrimination is to:
 a. charge higher prices to customers who have better access to substitutes.
  b. charge everyone the same price but limit the quantity they are allowed to buy.
  c. increase total revenue by charging higher prices to those with the most inelastic demand for the product and lower prices to those with the most elastic demand.
  d. reduce per-unit costs by charging higher prices to those with the most elastic demand and lower prices to those with the most inelastic demand.

Question 2

When the price of a good falls, consumers may increase the quantity consumed because they have greater total purchasing power. This statement describes the:
 a. substitution effect.
  b. income effect.
  c. consumer equilibrium effect.
  d. price effect.


Mochi

  • Sr. Member
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Reply #1 on: Jun 30, 2018
Answer to Question 1

c

Answer to Question 2

b


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