Suppose That a Price Discriminating Monopolist Is Able to Divide

question 104

Multiple Choice

Suppose that a price discriminating monopolist is able to divide its market into two groups. If the firm sells its product for $50 to the group whose customers have the most elastic demand, what price are they likely to charge to the group whose customers have the least elastic demand?

• A) $50
• B) more than $50
• C) less than $50
• D) The answer depends on the marginal revenue for that group.

Understand the importance and process of capital budgeting in corporate finance.

Understand the influence of political/legal and economic changes on market opportunities.

Recognize the importance of staying in touch with customers and responding to marketplace changes.

Identify the objective of the product decision and the components of a strong product strategy.

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