In Longolia,beer Drinking Is Associated with Blood Types

question 34

Multiple Choice

In Longolia,beer drinking is associated with blood types.The demand for beer of the three major blood groups is shown below:

-Refer to the above information to answer this question.If the beer producers could price discriminate on the basis of blood types,in order to maximize revenue,which of the following statements is correct?

• A)The consumer group with the highest price elasticity of demand should be charged the highest price.
• B)The consumer group with the highest price elasticity of demand should be charged the lowest price.
• C)The consumer group with the lowest price elasticity of demand should be charged the lowest price.
• D)The consumer group which should be charged the highest price depends upon which has the smallest marginal utility.

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Definitions:

Utility-maximizing Consumer

A consumer who aims to get the highest level of satisfaction possible from their purchases, given their budget constraints.

Income Effect

The income effect describes how changes in consumers' income impact their purchasing choices, typically affecting the quantity of goods consumed.

Marginal Utility

The further benefit or pleasure derived by consuming an extra unit of a good or service.

Utils

A theoretical unit of measurement used in economics to quantify the level of satisfaction or happiness that a consumer derives from the consumption of goods and services.