If a Price-Discriminating Monopolist Sells the Same Product in Two

question 229

Multiple Choice

If a price-discriminating monopolist sells the same product in two markets but charges a higher price in market X and a lower price in market Y, the pricing difference indicates that demand is

• A)more elastic in market X than in market Y.
• B)less elastic in market X than in market Y.
• C)less elastic in market Y than in market X.
• D)the same in both markets X and Y.

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Definitions:

Incorporated

The process of legally declaring a corporate entity as separate from its owners, providing it with certain legal rights and responsibilities.

Veil Will Be Pierced

A legal principle that allows for the corporate structure to be disregarded, exposing the shareholders to personal liability, typically in cases of fraud or when the corporation is a sham.

Separate Legal Entities

A status whereby a business is legally considered an independent entity from its owners, allowing it to own property, incur debt, sue, and be sued.

Minimum Contacts Test

A legal standard used to determine whether it is appropriate for a court in one jurisdiction to assert personal jurisdiction over a defendant from another jurisdiction.