A Monopolist Has a Constant Marginal Cost of $2 Per

question 13

Multiple Choice

A monopolist has a constant marginal cost of $2 per unit and no fixed costs. He faces separate markets in the United States and England. He can set one price p₁ for the U.S. market and another price p₂ for the English market. If demand in the United States is given by Q₁ = 6,000 - 600p₁ and demand in England is given by Q₂ = 2,400 - 400p₂, then the price in the United States will

• A) be larger than the price in England by $2.
• B) be smaller than the price in England by $2.
• C) equal the price in England.
• D) be larger than the price in England by $4.
• E) be smaller than the price in England by $4.