Suppose a Single-Price Monopolist Is Considering Becoming a Price Discriminating

question 17

Multiple Choice

Suppose a single-price monopolist is considering becoming a price discriminating monopolist.If the firm does begin to price discriminate,it can expect to:

• A)decrease its output and increase its profit.
• B)run into legal trouble with the anti-trust enforcers.
• C)increase its output,but decrease its profits.
• D)increase both its output and its profit.

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Definitions:

Competitive Market

A market structure characterized by a large number of buyers and sellers, free entry and exit, and products that are close substitutes, leading to price competition and efficiency.

Utility Functions

Represent mathematical models that quantify an individual's preference for certain bundles of goods or services under conditions of scarcity.

Public Good

An item or resource that cannot be withheld from anyone and whose consumption by one individual does not diminish its accessibility to others, characterized by being both non-excludable and non-rival.

Private Good

A product or service that is typically consumed by the purchaser and cannot be used or consumed by others.