{"id":211020,"date":"2025-05-02T13:50:50","date_gmt":"2025-05-02T13:50:50","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=211020"},"modified":"2025-05-02T13:50:52","modified_gmt":"2025-05-02T13:50:52","slug":"price-discrimination-successful-price-discrimination-requires-that-velg-ett-alternativ","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/05\/02\/price-discrimination-successful-price-discrimination-requires-that-velg-ett-alternativ\/","title":{"rendered":"Price discrimination Successful price discrimination requires that: Velg ett alternativ"},"content":{"rendered":"\n

Price discrimination Successful price discrimination requires that: Velg ett alternativ: all buyers have the same price elasticity of demand. buyers with inelastic demand be charged lower prices than buyers with elastic demand. buyers with inelastic demand be charged higher prices than buyers with elastic demand. all buyers be charged the same price regardless of their elasticity of demand.<\/p>\n\n\n\n

The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n

Correct answer:<\/strong>
Buyers with inelastic demand be charged higher prices than buyers with elastic demand.<\/strong><\/p>\n\n\n\n

Explanation:<\/strong><\/p>\n\n\n\n

Price discrimination is a pricing strategy where a seller charges different prices to different consumers for the same good or service, not based on cost differences, but on consumers\u2019 willingness to pay. For price discrimination to be successful and profitable, certain conditions must be met:<\/p>\n\n\n\n

    \n
  1. Market Segmentation<\/strong>: The seller must be able to segment the market into groups based on their price sensitivity, often reflected by the price elasticity of demand.<\/li>\n\n\n\n
  2. Different Elasticities<\/strong>: Consumers in different segments must have different price elasticities of demand.<\/li>\n\n\n\n
  3. No Arbitrage<\/strong>: It must be impossible or difficult for consumers to resell the product among themselves.<\/li>\n<\/ol>\n\n\n\n

    Price elasticity of demand measures how much the quantity demanded of a good responds to a change in price. When demand is inelastic<\/strong>, consumers are less sensitive to price changes\u2014they will continue to buy relatively the same quantity even if prices increase. When demand is elastic<\/strong>, consumers are more price-sensitive\u2014a small price increase can lead to a significant drop in quantity demanded.<\/p>\n\n\n\n

    To maximize profit, firms charge higher prices to those with inelastic demand<\/strong> because these consumers are less likely to reduce their consumption in response to price increases. On the other hand, firms charge lower prices to those with elastic demand<\/strong> to encourage them to buy, since high prices would cause them to cut back significantly or stop buying altogether.<\/p>\n\n\n\n

    For example, airline companies often charge business travelers (inelastic demand) higher fares than vacation travelers (elastic demand). Similarly, movie theaters may offer student discounts, recognizing that students have more elastic demand compared to regular patrons.<\/p>\n\n\n\n

    Thus, successful price discrimination hinges on identifying demand elasticity and aligning pricing strategies accordingly.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Price discrimination Successful price discrimination requires that: Velg ett alternativ: all buyers have the same price elasticity of demand. buyers with inelastic demand be charged lower prices than buyers with elastic demand. buyers with inelastic demand be charged higher prices than buyers with elastic demand. all buyers be charged the same price regardless of their […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-211020","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/211020","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=211020"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/211020\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=211020"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=211020"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=211020"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}