A monopolist who is able to price discriminate by charging two different groups different prices:
A) will set prices so that the demand curve for one group is inelastic at the price charged and the demand curve for the other group is elastic at the price charged.
B) will set prices so that both group's demand curves are elastic at the prices charged.
C) will set prices so that both group's demand curves are inelastic at the prices charged.
D) will set higher prices for the group whose demand curve is more elastic.

Question

Quizplus · Accepted Answer

A monopolist practicing price discrimination will charge different prices to different groups based on their price elasticity of demand, setting prices where demand is elastic to maximize profit.

A Monopolist Who Is Able to Price Discriminate by Charging