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

question 2

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 $6 in one market and $8 in the other market. At these prices, the price elasticity in the first market is -2.40 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 both p₁ and p₂.
• B) Raise p₁ and lower p₂.
• C) Raise p₂.
• D) Lower p₂.
• E) Raise p₂ and lower p₁.

---

Definitions:

Balloon Angioplasty

A medical procedure used to widen blocked or narrowed arteries, particularly in the heart, using a small balloon mounted on a catheter.

Coronary Artery

The artery that supplies the heart muscle with oxygen-rich blood, crucial for its functioning.

Gallbladder Function Test

Medical tests that assess the health and functionality of the gallbladder, often involving imaging techniques to evaluate bile storage and flow.

Bile Duct

A network of tubes that carry bile from the liver and gallbladder to the intestine, aiding in digestion.