Question

A firm carries out price discrimination when it charges

a. a lower price to consumers whose demand is more elastic.
b. the same price to all of their consumers.
c. a higher price when their marginal cost is lower.
d. a higher price to consumers whose demand is more elastic.

Answer 1

A firm carries out price discrimination when it charges a lower price to consumers whose demand is more elastic. Price elasticity measures the relationship change between the quantity demanded or purchase of a product when the price changes. Price discrimination is when a company changes the priced based on the person making the purchase of the product.