Consider a Monopolist That Is Able to Distinguish Between Two

question 73

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.Is this firm maximizing its profit?

• A)No,this firm can increase its profits by price discriminating across the two market segments.
• B)No,because it is only possible to equate MR and MC when there is a single MR curve.
• C)Yes,because since marginal cost is constant,the firm must set a single price.
• D)Yes,because it has set a price such that MC is between the MRs of the two market segments.

---

Definitions:

Systemic Chemicals

Chemical substances that are absorbed by an organism, affecting its entire system rather than a localized area, often used in plants to provide internal protection against pests.

Systemic Herbicides

Chemical substances used to kill unwanted plants, absorbed through the roots or foliage and transported throughout the plant to inhibit growth.

Contact Herbicides

Herbicides that kill plants upon direct contact, typically by disrupting cell membranes or other physiological functions, without being absorbed systemically.

Atrazine

A herbicide widely used to control broadleaf and grassy weeds in crops like corn and sugarcane.