Consider a Monopolist That Is Able to Distinguish Between Two

question 20

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 $100 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 $85 and marginal revenue in segment B is $105.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:

Corporate Supervisory Boards

Oversight bodies in certain corporate governance structures responsible for monitoring and guiding the executive board and protecting shareholders' interests.

Labor Relations Law

Laws that regulate the relationship between employers, employees, and their labor unions, focusing on collective bargaining, strikes, and workplace rights.

Arbitration Awards

Decisions made by arbitrators in a dispute resolution process, which are typically binding on all parties involved.

Collective Bargaining

The act of discussing and coming to mutual decisions between workers and management on employment terms.