How Is It Logically Possible for a Monopolist to Get

question 19

Multiple Choice

How is it logically possible for a monopolist to get different consumers to purchase different bundles on a menu (such as different sizes of coffee cups) ,and thereby achieve a form of price discrimination,even if the firm cannot observe the consumers' valuations directly?

• A) different types of consumers have different tradeoffs between money and amounts of the good.
• B) the monopolist can use a market-separation strategy.
• C) social norms are powerful deterrents to lying about one's type.
• D) this is impossible: if one bundle is preferred by one type, logically it will be preferred by all.

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Definitions:

Standard Error

Measures the accuracy with which a sample represents a population, showing the dispersion of sample means around the true population mean.

Test Statistic

A standardized value derived from sample data during a hypothesis test that is used to determine the p-value or to compare against the critical value.

Population Means

The average value of a set of characteristics or figures for the entire population.

Credit Purchases

Transactions where goods or services are acquired with an agreement to pay later, often using a credit card or account.