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Colleges are able to practice price discrimination by separating their students into distinct income groups using the Free Application for Federal Student Aid (FAFSA) and

Colleges are able to practice price discrimination by separating their students into distinct income groups using the Free Application for Federal Student Aid (FAFSA) and by offering a two-tiered pricing structure based on residency. Based on what we know about price elasticity of demand, what is generally true about these distinct groups?

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