Suppose a Profit-Maximizing Monopoly Is Able to Employ Group Price

question 28

Multiple Choice

Suppose a profit-maximizing monopoly is able to employ group price discrimination. The marginal cost of providing the good is constant and the same in both markets. The marginal revenue the firm earns on the last unit sold in the market with the lower price will be

• A)greater than the marginal revenue the firm earns on the last unit sold in the market with the higher price.
• B)less than the marginal revenue the firm earns on the last unit sold in the market with the higher price.
• C)equal to the marginal revenue the firm earns on the last unit sold in the market with the higher price.
• D)greater than the marginal cost of the last unit.

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Definitions:

K-selected

Characterizes species that produce fewer offspring, with a larger investment in each, typically adapting to stable environments where competition is strong.

Biotic Potential

An organism’s greatest capability to reproduce in the best possible environmental circumstances.

Environmental Resistance

Factors in the environment that limit the growth, abundance, or distribution of organisms or populations within an ecosystem.

Pathogens

Microorganisms that cause disease in their hosts, including bacteria, viruses, fungi, and parasites.