In order to price-discriminate, a firm must be able to separate its customers who have different elasticities of demand. A firm can earn more revenue by charging higher prices to consumers with relatively inelastic demand, and lower prices to consumers with relatively elastic demand. Consider the different customers listed below. Which ones have relatively inelastic demand, and which ones have relatively elastic demand?

Items(4 items)(Drag and drop into the appropriate area below)

• Kallie buys clothes at an outlet mall.
• Grandpa Joe, who is retired, eats dinner at 5:00 p.m.
• Jordan goes to an out-of-state university.
• Donald needs to travel for business.

Categories

• Relatively elastic
• Drag and drop here
• Relatively inelastic
• Drag and drop here