If a price-discriminating monopolist sells the same product in two markets but charges a higher price in market X and a lower price in market Y, the pricing difference indicates that demand is
A)more elastic in market X than in market Y.
B)less elastic in market X than in market Y.
C)less elastic in market Y than in market X.
D)the same in both markets X and Y.

Question

Quizplus · Accepted Answer

The pricing difference indicates that demand is less elastic in market X than in market Y, as the monopolist can charge a higher price in market X without losing many sales, suggesting consumers in X are less sensitive to price changes.

If a Price-Discriminating Monopolist Sells the Same Product in Two