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:

Decision-making

The cognitive process of selecting a course of action from among multiple alternatives, often considered a core function of management.

Intuition

Refers to the ability to understand something immediately, without the need for conscious reasoning.

Unrestrained rationality

Decision-making or thought processes that are conducted without limits or boundaries, often overlooking emotional or contextual factors.

Decision-Making under certainty

The process of making decisions when the outcomes or consequences of each choice are known or predictable.