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

question 16

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 $2 in one market and $12 in the other market. At these prices, the price elasticity in the first market is -2.50 and the price elasticity in the second market is -0.70. Which of the following actions is sure to raise the monopolist's profits?

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

---

Definitions:

Goffman

Erving Goffman was a sociologist best known for his work on symbolic interactionism and the study of everyday life interactions and social stigma.

Human Experience

The sum total of an individual's perceptions, thoughts, emotions, and interactions within their environment.

Performance

An act of executing a task or displaying a skill before an audience, or the action or process of carrying out or accomplishing an action, task, or function.

Symbolic Interactionists

Sociologists who focus on the study of how individuals interpret and give meaning to symbols within society, shaping their behaviors and interactions.