Suppose the Market for Some Product Can Be Divided into Two

question 29

Multiple Choice

Suppose the market for some product can be divided into two segments,each with a linear demand curve.A monopolist can set a different price (but only one price) in each segment.The profit-maximizing price discrimination across these two market segments will lead to

• A)higher output with average revenue higher than the best single price.
• B)lower output with total revenue higher than the single best price.
• C)lower output with a higher average revenue than the best single price.
• D)higher output with average revenue lower than the best single price.
• E)the same output but higher average revenue than the best single price.

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Definitions:

Eukaryotes

Organisms whose cells contain a nucleus and other organelles enclosed within membranes, distinguishing them from prokaryotes.

Prokaryotes

Single-celled organisms lacking a nucleus and other membrane-bound organelles, such as bacteria.

Translation

Process in which a polypeptide chain is assembled from amino acids in the order specified by an mRNA.

Enzymatic Activity

The catalytic action of enzymes in facilitating biochemical reactions without being consumed in the process.