Question

If the owner of a concert hall wishes to use third-degree price discrimination to price its tickets at $20, $15, and $10, it should price tickets lower for customers who

Answer 1

Answer: more elastic in their demand for tickets

Explanation:

Third-degree price discrimination is used by company when different price is being charged to a particular group of consumers.

Based on the scenario in the question, the owner of the concert hall should price tickets lower for customers who are more elastic in their demand for tickets.

Elastic demand simply means that a little change in the price of the concert hall will lead to a higher change in the quantity demanded. In this case, when the price increases, such people will buy little tickets. Therefore, the prices should be set lower for these set of people as there will be a huge increase in demand when the price is lower.