Discrimination to sell cologne under two different lables

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Reference no: EM131093153

A firm uses third-degree price discrimination to sell the same cologne under two different labels. The price elasticity of demand for `High Class' is -1.25. The price elasticity of demand for `Splash-This-Stuff-On' is -2. Which one of the following statements is true?

The price of `High Class' will be 2/5 times the price of `Splash-This-Stuff-On.

The price of `High Class' will be 5/2 times the price of `Splash-This-Stuff-On

The price of `High Class' will be 1/7 times the price of `Splash-This-Stuff-On.

The price of `High Class' will be 8/5 times the price of `Splash-This-Stuff-On.

Reference no: EM131093153

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