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)

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

Categories

• Relatively elastic

OR

• Relatively inelastic