Consider a Monopolist That Is Able to Distinguish Between Two

question 63

Multiple Choice

Consider a monopolist that is able to distinguish between two distinct market segments,A and B,for its product.Marginal cost is constant at $100 for each unit produced.The firm is currently selling its output at a single price and allocating its output across segments such that marginal revenue in segment A is $85 and marginal revenue in segment B is $105.How can this firm maximize its profit?

• A)increase the output in segments A and B
• B)increase the output in segment A and decrease the output in segment B
• C)maintain the current output and its allocation across segments
• D)decrease the output in segment A and increase the output in segment B
• E)decrease the output in segments A and B

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