If the firm selling good z can charge different prices to different groups of people, the firm would prefer to lower the price charged to the elastic group and raise the price charged to the inelastic group.
When the willingness of an individual to buy any product is increased it gives rise to demand. This willingness will shift with a change in the price or quality.
The elasticity of demand is the term used to describe how quickly consumer preferences can shift in response to a product's price level.
The company that discriminates on price charges the lowest price to customer groups with equally or more elastic demand. This is due to the fact that consumers with more elastic demand are significantly more flexible to price fluctuations, which forces businesses to impose lower pricing.
Learn more about elastic demand, here:
https://brainly.com/question/23301086
#SPJ1
