Figure: Two Demand Curves a Monopolist Sells Its Output

question 175

Multiple Choice

Figure: Two Demand Curves A monopolist sells its output in two markets, each with different demand curves as shown in this figure. If the marginal cost is identical in both markets, the monopolist should charge a ______ price in the inelastic market, represented by the demand curve ______.

• A) higher; D₂
• B) higher; D₁
• C) lower; D₂
• D) lower; D₁

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Definitions:

Accuracy

The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.

Specifying

The process of identifying and detailing exact requirements or features.

Planning

The process of setting objectives, determining strategies to achieve those objectives, and developing plans to integrate and coordinate activities.