A Price-Discriminating Monopolist Sells in Two Separate Markets Such That

question 9

Multiple Choice

A price-discriminating monopolist sells in two separate markets such that goods sold in one market are never resold in the other.It charges $4 in one market and $9 in the other market.At these prices, the price elasticity in the first market is -1.50 and the price elasticity in the second market -0.40.Which of the following actions is sure to raise the monopolist's profits?

• A)Lower p₂.
• B)Raise p₂.
• C)Raise p₁ and lower p₂.
• D)Raise both p₁ and p₂.
• E)Raise p₂ and lower p₁.

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Definitions:

New Industries

Emerging sectors of the economy that arise from technological advancements, innovation, or societal changes, offering new opportunities for business and employment.

Economic Domination

A condition where a single entity or a group of entities holds significant control or influence over the economic policies, resources, or markets of a region or country.

Transnational Corporation

A large company operating in several countries around the world, managing production or delivering services in more than one country.

Borderless Basis

Describes an approach or system that operates without the limitations or barriers imposed by geographic or political boundaries.