When a Monopolist Sells the Same Product at Different Prices

question 52

Multiple Choice

When a monopolist sells the same product at different prices and the prices are not related to cost differences, we have

• A) monopoly pricing.
• B) marginal cost pricing.
• C) price discrimination.
• D) price differentiation.

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Definitions:

Bonds

These are fixed-income investment products where an investor loans money to an entity (corporate or governmental) that borrows the funds for a defined period of time at a fixed interest rate.

Debt Instruments

Financial assets that represent a debtor's obligation to repay borrowed money or other forms of credit to the creditor according to stated terms.

Original Issue Discount

The difference between the par (face) value of a bond and the lower price at which it was originally sold, which must be reported as interest income over the life of the bond.

Tax-exempt Debt

Debt securities issued by state or municipal governments whose interest payments are exempt from federal income tax, and sometimes state and local taxes.