A Monopolist Finds That a Person's Demand for Its Product

question 24

Multiple Choice

A monopolist finds that a person's demand for its product depends on the person's age. The inverse demand function of someone of age y can be written p = A(y) - q, where A(y) is an increasing function of y. The product cannot be resold from one buyer to another and the monopolist knows the ages of its consumers. If the monopolist maximizes its profits,

• A) older people will pay higher prices and purchase less of this product.
• B) older people will pay higher prices and purchase more of this product.
• C) older people will pay lower prices and purchase more of this product.
• D) everyone will pay the same price but older people will consume more.
• E) None of the above

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Definitions:

Stage 2 Sleep

The second phase of the sleep cycle, characterized by the body's gradual decrease in temperature and heart rate, preparing for deep sleep.

Barbiturate

An addictive depressant used to relieve anxiety or induce sleep.

Nembutal

A barbiturate used medically as a sedative and anesthetic, but also known for its use in euthanasia and assisted suicide.

Nicotine

A stimulant drug found in tobacco products that is highly addictive.