3. Suppose you have a good that you can sell to two different markets over which you have pricing power. The marginal co

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3 Suppose You Have A Good That You Can Sell To Two Different Markets Over Which You Have Pricing Power The Marginal Co 1 (29.92 KiB) Viewed 20 times

3. Suppose you have a good that you can sell to two different markets over which you have pricing power. The marginal cost is the same regardless of market. The elasticity of demand for one market (call it "Market A" representing a certain type of customer) is 4 and the elasticity of demand for the other market (Market B) is 3. Evaluate this claim: The market B should get charged a 12.5% higher price than market A. True or false (and explain briefly... the best answers will show and use the appropriate formula!) Can you think of any examples where this logic would apply? How do firms attempt to segment markets to be able to exploit this?