Suppose a Manager Is Interested in Implementing Third-Degree Price Discrimination

question 108

Multiple Choice

Suppose a manager is interested in implementing third-degree price discrimination.The manager knows that the price elasticity of demand for Group 1 is -2 and the price elasticity of demand for Group 2 is -1.2.Based on this information alone we can conclude that the price charged to Group 2 will be

• A)the same as the price charged to Group 1.
• B)lower than the price charged to Group 1.
• C)higher than the price charged to Group 1.
• D)there is insufficient information to determine whether Group 2 will have a higher, lower or the same price as Group 1.

---

Definitions:

General Aggression Model

A comprehensive framework that explains the complex process by which individual, situational, and sociocultural factors contribute to aggressive behavior.

Aggressive Behaviors

Actions that intend to cause harm or increase social dominance through physical or verbal means.

Depressive Cognitive Triad

Involved in behavioral psychology, this trio focuses on a depressive individual's pessimistic views concerning themselves, their future and their surroundings, contributing to maintaining their depression.

Negative Thoughts

Unhelpful and often irrational thoughts that can contribute to feelings of anxiety, depression, and stress.