Suppose That a Price Discriminating Monopolist Is Able to Divide

question 98

Multiple Choice

Suppose that a price discriminating monopolist is able to divide its market into two groups. If the firm sells its product for $25 to the group whose customers have the least elastic demand, what price are they likely to charge to the group whose customers have the most elastic demand?

• A) $25
• B) more than $25
• C) less than $25
• D) The answer depends on the marginal revenue for that group.

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Definitions:

Ganglionic Synapse

A junction between neurons in a ganglion, where neurotransmission occurs.

Preganglionic Neuron

Autonomic neuron that has its cell body located within the central nervous system and sends its axon through a nerve to an autonomic ganglion, where it synapses with postganglionic neurons.

Postganglionic Axons

The axons of neurons that conduct impulses away from a ganglion in the peripheral nervous system to a target organ.

Preganglionic Axons

Nerve fibers originating from the central nervous system that extend to a ganglion, transmitting impulses to postganglionic neurons.