A Monopolist Sells a Homogeneous Good in Several Distinct Submarkets

question 68

Multiple Choice

A monopolist sells a homogeneous good in several distinct submarkets, and the elasticities of demand differ in these submarkets. If the monopolist selects the rate of output to sell in each submarket by equating marginal revenue and marginal cost, then

• A) all customers in all markets end up paying the same price.
• B) it is not price discriminating, but merely price differentiating.
• C) customers in markets with more elastic demand will pay higher prices than customers in markets with less elastic demand.
• D) customers in markets with more elastic demand will pay lower prices than customers in markets with less elastic demand.

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Definitions:

Seat Belt

A safety device in vehicles designed to secure the occupant against harmful movement that may result during a collision or a sudden stop.

Spontaneous Recovery

The reappearance of a previously extinguished conditioned response after a period of no exposure to the conditioned stimulus.

Crying

The act of shedding tears as a response to an emotional state, such as sadness, happiness, or pain.

Ignoring

A behavior management strategy where certain behaviors are deliberately not reinforced, with the aim of reducing or extinguishing them by not providing attention.