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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