Differences in the price elasticity of demand

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Many manufacturers of clothing and other consumer goods open stores in outlet malls where they charge much lower prices than they charge in their own stores located within cities. Outlet malls are typically located a considerable distance from major metropolitan areas, and stores in them typically charge much lower prices than do stores located within cities. Given that both sets of stores are often owned by the same firm, explain this price discrimination based on likely differences in the price elasticity of demand between consumers in the two types of stores.

Explain as simply as possible.

Reference no: EM131094698

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