A Third-Degree Price Discriminating Monopolist Can Sell Its Output Either

question 116

Multiple Choice

A third-degree price discriminating monopolist can sell its output either in the local market or on an internet auction site (or both) . After selling all of its output, the firm discovers that the marginal revenue earned in the local market was $20 while its marginal revenue on the internet auction site was $30. To maximize profits the firm should:

• A) have sold more output in the local market and less at the internet auction site.
• B) do nothing until it acquires more information on costs.
• C) have sold less output in the local market and more on the internet auction site.
• D) sell less in both markets until marginal revenue is zero.
• E) sell more in both markets until marginal cost is zero.

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Definitions:

Sporophyte

The diploid, spore-producing phase in the life cycle of a plant that alternates with the haploid gametophyte phase.

Nonvascular

Refers to plants that lack vascular tissue, making them incapable of transporting water and nutrients over long distances.

Alternation of Generations

A reproductive cycle found in certain plants and algae, involving a sequential occurrence of two distinct forms, one haploid and the other diploid, each giving rise to the other.

Zygote

Diploid cell formed by the union of two gametes; the product of fertilization.