A Monopolist Faces Two Consumer Groups: Old and Young $P _ { 0 } = 100 - 2 Q _ { 0 }$

question 45

Multiple Choice

A monopolist faces two consumer groups: old and young. The inverse demand of old clients for the output of the monopolist is $P _ { 0 } = 100 - 2 Q _ { 0 }$ . The inverse demand of young clients for the output of the monopolist is $P _ { y } = 80 - Q _ { y }$ . The marginal cost of supplying any type of client is $M C = 10$ . If the monopolist can price discriminate between the two groups (i.e., charge a different uniform price to each group) , what price will old and young clients be charged?

• A) \(P _ { 0 } = \$ 45 ; P _ { y } = \$ 55\)
• B) \(P _ { o } = \$ 55 ; P _ { y } = \$ 45\)
• C) \(P _ { 0 } = \$ 50 ; P _ { y } = \$ 50\)
• D) \(P _ { o } = \$ 40 ; P _ { y } = \$ 60\)

Distinguish between different types of regulation (social vs. industrial) and understand their implications.

Comprehend the economic reasoning behind monopolies, mergers, and market powers as addressed in antitrust regulations.

Identify and understand the legal frameworks that govern mergers, market dominance, and competitive practices.

Evaluate the effects of antitrust enforcement on business practices and market competition.

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Definitions:

Chronic Diseases

Long-lasting conditions that often require ongoing medical attention or limit activities of daily living, such as diabetes, heart disease, and cancer.

Infectious Disease

Illnesses caused by pathogens such as viruses, bacteria, fungi, or parasites that are contagious.

Life Expectancy

Life expectancy refers to the average period that a person is expected to live based on demographic factors such as the year of their birth, their current age, and other social factors.

Chronic Diseases

Long-lasting conditions that can be controlled but not always cured, affecting an individual's quality of life.