If a Monopoly Is Price Discriminating Between Two Groups,A and B,based

question 50

Multiple Choice

If a monopoly is price discriminating between two groups,A and B,based on observable customer characteristics,there is no difference in the marginal cost of selling to the two groups,and the elasticity of demand for group A is -1.5 while the elasticity of demand for group B is -2.1,which of the following is true?

• A) The markup and price for group A customers will be higher than for group B customers.
• B) The markup and price for group B customers will be higher than for group A customers.
• C) The markup for group A customers will be higher than for group B customers, but there is not enough information to determine which price will be higher.
• D) The price for group A customers will be higher than for group B customers, but there is not enough information to determine which markup will be higher.

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Definitions:

Overthrust Belt

A region in the earth's crust where large areas of rock have been moved over one another typically due to compressional forces.

Anticline

A type of fold that is convex up and has its oldest beds at its core, often associated with the trapping of petroleum.

Green River Basin

A major river basin in the western United States, known for its significant deposits of oil shale and natural gas.

Petroleum

A naturally occurring liquid found beneath the Earth's surface that can be refined into fuel and other products.