Answer:
Price-discriminating firms will impose a price structure that offers customers with a less elastic demand a higher price and offers customers with a(n) more elastic demand a lower price.
Explanation:
Price elasticity of demand indicates how responsive the demand for a product is to changes in prices. If a product does not react to a change in price, that product is said to be price elastic.
A price discriminating firm can set a higher price to a market segment that shows price is elastic characteristics. The quantities demanded by customers that are price elastic will not be greatly affected if the prices are a little bit higher.
If customers are price sensitive or react to a small change in price, the firm should set a low price for them. Demand by such customers will reduce substantially if the price is high.
