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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