If demand curves are different in two markets, it is ______ to set different prices in each market than to set a single price.
A) less profitable
B) equally profitable
C) more profitable
D) unprofitable

Question

Quizplus · Accepted Answer

If demand curves are different in two different markets, it is more profitable to set different prices in each market based on their respective demand curves. This will enable the firm to maximize profits in each market by charging a price that corresponds to the demand for the product. A uniform price across markets may result in lost sales or lower profits in one or both markets. Therefore, setting different prices in each market would be the best choice to capture the maximum possible profits.

If Demand Curves Are Different in Two Markets, It Is