Price Discrimination Is Related to Elasticity Because

question 134

Multiple Choice

Price discrimination is related to elasticity because

• A) the firm can increase revenues by charging customers with elastic demands higher prices and charging customers with inelastic demands lower prices.
• B) the firm can increase revenues by charging customers with elastic demands lower prices and charging customers with inelastic demands higher prices.
• C) the firm can increase revenues by charging all customers higher prices.
• D) None of the above; elasticity and price discrimination are unrelated.

---

Definitions:

Total Output

The total quantity of goods or services produced by a firm or economy over a specific period.

Isoquants

Curves that represent the combinations of inputs that yield the same level of output, used in production theory.

Perfectly Substitutable

Products or services that can be used in place of one another without any loss of utility or value to the consumer, often influencing competitive markets.

Inputs

Resources used in the process of production, including labor, capital, materials, and energy.