Answer to Question #91083 in Microeconomics for Gill

Question

6. Walmart sells exactly same goods cheaper in the US than in Canada. “But the United States is way larger market than Canada, so the demand for (almost) everything is greater in the USA, and Walmart should be charging the American buyers more!” What is wrong with this statement? (hint: think what price discrimination scheme is in place).

Answer 1

The wrong is that not the amount of demand, but elasticity of demand. So, if the price in Canada is higher, than the demand in Canada is less elastic.