A Monopolist Is Able to Practice Third-Degree Price Discrimination Between

question 32

Multiple Choice

A monopolist is able to practice third-degree price discrimination between two markets. The demand function in the first market is q = 500 - 2p and the demand function in the second market is q = 1,500 - 6p. To maximize his profits, he should

• A) charge a higher price in the second market than in the first.
• B) charge a higher price in the first market than in the second.
• C) charge the same price in both markets.
• D) sell only in one of the two markets.
• E) None of the above.

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Definitions:

Unconditional Promise

A commitment or guarantee that is not subject to any conditions or stipulations.

Agreement to Sell

An agreement to sell indicates a mutual understanding or contract between parties to transfer property or goods from seller to buyer in the future.

Expiry Dates

Specified dates after which a product is no longer considered safe or effective to use, or a period is considered to have ended.

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