Consider a Monopolist That Is Able to Distinguish Between Two

question 6

Multiple Choice

Consider a monopolist that is able to distinguish between two distinct market segments,A and B,for its product.Marginal cost is constant at $18 for each unit produced.The firm is currently selling its output at a single price and allocating its output across segments such that marginal revenue in segment A is $25 and marginal revenue in segment B is $15.How can this firm maximize its profit?

• A)increase the output in segment A and decrease the output in segment B
• B)increase the output in segments A and B
• C)decrease the output in segment A and increase the output in segment B
• D)decrease the output in segments A and B
• E)maintain the current output and its allocation across segments

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Definitions:

Contingency Management

A behavioral therapy technique that rewards or punishes individuals for their behaviors, often used in addiction treatment to encourage sobriety.

Detoxification Procedures

Medical or therapeutic measures taken to remove toxic substances or effects of substances from a person's body, commonly associated with substance abuse recovery.

Withdrawal Symptoms

Physical or mental symptoms that occur after stopping or reducing intake of a substance that was used regularly.

Treatment Success

The effective resolution or significant improvement of symptoms following a specified therapeutic intervention.