(Last Word) Suppose that a firm has "pricing power" and can segregate its market into two distinct groups based on differences in elasticities of demand. The firm might charge:
A. a lower price to the group that has the less elastic demand.
B. a higher price to the group that has the less elastic demand.
C. the same price to both groups but include a "free" related product for the group that has an
inelastic demand.
D. the same price to both groups but make it difficult for the group with the more elastic
demand to gain access to the product.
Answer: B
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