Price elasticity of demand for splash-this-stuff-on

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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?

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

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

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

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

Reference no: EM131092970

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