In Order to Maximize Revenue from the Sale of a Fix

question 15

Multiple Choice

In order to maximize revenue from the sale of a fix quantity of output in two markets, a monopolist engaged in ordinary price discrimination would:

• A)sell half the goods in each market.
• B)make sure it sells all the units of the good.
• C)allocate output so that MC is the same in both markets.
• D)allocate output so that MR is the same in both markets.

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Definitions:

Purely Competitive Market

A market structure characterized by many buyers and sellers, free entry and exit, and a homogenous product.

Cost Data

Details about the costs associated with creating a product or service, such as the expenses for materials, workforce, and indirect costs.

Purely Competitive Producer

A producer in a market structure characterized by many small firms, homogeneous products, and free entry and exit, leading to zero economic profit in the long run.

Economic Profit

The differential amount left after subtracting all types of costs, both seen and unseen, from the total income.