Joe’s Diner gives senior citizens a 10% discount on all meals. This implies that young people must have demand curves that are _____ than those of senior citizens.
closer to perfectly elastic
less inelastic
more elastic
less elastic
The correct answer is "less elastic."
When a business offers discounts to a specific group, such as senior citizens, it often indicates that the demand for that group's meals is less sensitive to price changes (less elastic) compared to other groups, like young people. Young people, who do not receive the discount, may be more responsive to price changes, indicating that their demand is more elastic.