Question

In third−degree price​ discrimination, markets with a smaller price elasticity of demand are​ ________ responsive to price changes and are charged​ ________ prices than markets with a larger price elasticity of demand.

A.

​less; lower

B.

​more; lower

C.

​more; higher

D.

​less; higher

Answer 1

If we talk in general terms then 3rd degreeprice discrimination is related with the demographics like discounts for senior ,students ,military personals etc

Now if the demand price elasticity of demand is smaller it means the demand is inelastic in nature

when the demand is inelastic then proportion of price change is very high as compare to proportion of quantity demanded

so it is more responsive to price changes and when the demand is inelastic then they charge higher prices than markets with a large price elastcity of demand

so the correct answer here is option C