Assume That the Buyers of Good Z Fall into Two

Multiple Choice

Assume that the buyers of good Z fall into two groups: buyers that have elastic demand and buyers that have inelastic demand. If the firm selling good Z can charge different prices to different groups of people, the firm would prefer to ______________ the price charged to the elastic group and _______________ the price charged to the inelastic group.

A) raise; lower
B) lower; lower
C) lower; raise
D) raise; raise