Suppose a Producer Is Able to Separate Customers into Two

question 63

Multiple Choice

Suppose a producer is able to separate customers into two groups,one having an inelastic demand and the other having an elastic demand.If the producer's objective is to increase total revenue,she should

• A) increase the price charged to customers with the elastic demand and decrease the price charged to customers with the inelastic demand.
• B) decrease the price charged to customers with the elastic demand and increase the price charged to customers with the inelastic demand.
• C) decrease the price to both groups of customers.
• D) increase the price for both groups of customers.

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Definitions:

Clinton Administration

The executive branch of the U.S. government from 1993 to 2001 under President Bill Clinton.

Social Problems

Issues within a society that are viewed as causing significant harm or discomfort to members of the community, such as poverty, violence, or pollution.

Economic Problems

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Disturbances or conflicts within a society that involve multiple ethnic groups, often as a result of tensions related to cultural, political, or economic issues.