If sellers could price-discriminate and charge two different prices to two different groups of buyers in order to increase revenues, then the sellers would charge
A)a higher price to the buyers whose demand is elastic.
B)a higher price to the buyers whose demand is inelastic.
C)a higher price to the buyers whose demand is unit-elastic.
D)the same price, actually, because price-discrimination will result in lower revenues.

Question

Quizplus · Accepted Answer

Sellers would charge a higher price to buyers whose demand is inelastic because those buyers are less sensitive to price changes and are more likely to continue purchasing the product despite the higher price, thus increasing the seller's revenues.

If Sellers Could Price-Discriminate and Charge Two Different Prices to Two