Suppose a Monopolist Sells One Version of Its Output to Consumers

question 60

Multiple Choice

Suppose a monopolist sells one version of its output to consumers and another version to businesses.The marginal cost of the consumer version is $5 per unit while the business version has marginal costs of $5.75.If resale is impossible,one can infer that:

• A)the monopolist will charge two different prices and is not necessarily practicing price discrimination.
• B)the monopolist will charge a uniform price to both consumers and businesses.
• C)the monopolist will charge two different prices and is perfectly price discriminating.
• D)the monopolist will charge two different prices and is imperfectly price discriminating.

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Definitions:

Cumulative Percent

A measure that shows the percentage of data points less than or equal to a particular value, accumulated over a distribution or data set.

Frequency Distribution

A frequency distribution is a summary of how often different values or ranges of values occur within a set of data.

Skewed

A distribution that is not symmetrical, tending to have a longer tail on one side.

Asymmetrical

Lacking symmetry; when two halves of something do not match or when a set of data is not evenly distributed around the mean.