A Price-Discriminating Monopolist Sells in Two Separate Markets Such That

question 6

Multiple Choice

A price-discriminating monopolist sells in two separate markets such that goods sold in one market are never resold in the other. It charges p₁ = $2 in one market and p₂ = $8 in the other market. At these prices, the price elasticity in the first market is -2.20 and the price elasticity in the second market is -0.10. Which of the following actions is sure to raise the monopolist's profits?

• A) Lower p₂.
• B) Raise p₂.
• C) Raise both p₁ and p₂.
• D) Raise p₁ and lower p₂.
• E) Raise p₂ and lower p₁.

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Definitions:

Human Resource Management

The strategic approach to the effective management of people in a company or organization to help their business gain a competitive advantage.

Employee Selection

The process of evaluating and choosing individuals to fill job vacancies in an organization through various assessment methods.

Human Capital Perspective

A view that considers employees as assets whose value can be enhanced through investment in education, training, and development.

Productivity Resource

An asset, tool, or factor that can be utilized to enhance the efficiency or output of work processes.