If Different Markets for a Product Produced by a Monopolist

question 49

Multiple Choice

If different markets for a product produced by a monopolist can be separated and if the elasticity of demand differs between the two markets, then the monopolist will

• A) be able to make higher profits by using price discrimination.
• B) charge a single price in all markets.
• C) go out of business.
• D) sell the product in only one of the markets with inelastic demand curves.

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Definitions:

Normal Balance

The side (debit or credit) of an account that is normally increased. For assets and expenses, it is the debit side; for liabilities, equity, and revenue, it is the credit side.

Account Nature

Refers to the intrinsic characteristics of an account that determine how transactions are recorded and classified, such as whether it is an asset, liability, revenue, or expense account.

Financial Statement

Reports that quantify the financial strength, performance, and liquidity of a company during a specific period.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, indicating its typical increase direction.